This analysis reveals the effects of monetary policy on foreign direct investment inflows in Iraq, suggesting stable policies could attract more capital.
This research analyzes the relationship between monetary policy and foreign direct investment (FDI) inflows in Iraq (2004 2023), using the ARDL methodology to test both short- and long-term relationships. The study focuses on key monetary policy variables such as money supply, exchange rate, inflation rate, and interest rate, and their impact on net FDI. The results revealed a long-term equilibrium relationship among the studied variables, showing a significant negative impact of money supply and inflation, while exchange rate and interest rate had a significant positive effect on FDI inflows. The study concludes that adopting more stable and flexible monetary policies is crucial for enhancing the investment environment and attracting foreign capital, especially in light of the economic and financial challenges facing the Iraqi economy.
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Hussein et al. (2025) studied this question.