Analysis of the components of the monetary base and its determinants in the Iraqi economy for the period 2004-2018

Abstract

The basic components of the money supply are called the monetary base, which is formed through money issues by the central bank through the central bank buying government bonds through open market operations. The monetary base and identifying the sources and uses of that base and clarifying the most important determinants of that base in the Iraqi economy during the period 2004-2018. The monetary base may be affected by a set of factors and determinants whose effects are reflected in one way or another on the economic activity as a whole. The central bank is the one who has the right to issue paper currencies and mint coins, and these issues are placed in circulation and under the public’s reach. Part of them may turn into bank deposits and this part represents a leakage from the income cycle Which negatively affects the monetary base. The study concluded that the monetary base in the Iraqi economy is based on the assets side of the monetary equation of the central bank, and therefore any change in the components of that base will be reflected in the size of the monetary base for the overall economy.