Non-traditional Tools for the Central Bank of Iraq as a Model

Abstract

This research deals with the study of the case of the Iraqi economy and the crises that occurred in it due to the country's dependence on non-traditional monetary policy tools. The accumulation of deficit in the general budget in Iraq is a result of the decline in public revenues and the increase in public expenditures due to the economic blockade and its negative repercussions, as well as the results of wars that cost the country money. This is why we find the divergence of monetary and fiscal policy measures according to what the monetary policy is that finances the deficit in the public budget and through its traditional and non-traditional levels, especially after the emergence of the remnants of the economic blockade, and thus the debts rose, which represent the total deficits of the general budget. We also note that the monetary policy proceeds according to the financial policy. The Central Bank is responsible for financing the deficit in the general budget through (the new monetary issue and quantitative easing) and these financing mechanisms structural imbalances in some monetary variables that prevent the central bank from financing the government, whether directly or indirectly.