The Impact of Monetary Policy on Economic Stability in Light of the COVID-19 Pandemic in Oil-Producing Countries: the Case Of Iraq

Abstract

Purpose: The rapid spread of the COVID-19 Pandemic had significant effects on the global and local economy alike, represented in the decline in economic growth rates and the decline in international oil prices as a result of the decrease in global consumption of it, and then its greatest impact on the local economy was the rule of economic instability. Theoretical framework: This is as a result of the decline in oil revenues and the increase in the size of the financial deficit in the general budget, which led to the financing of that deficit by decreasing the exchange value of the dinar, and then the rise in inflation rates in the country. Design/Methodology/Approach: the decline in dollar revenues in light of this crisis and the prevailing impact of the struggle stock exchange on the exchange rate contributed to the widening of the gap between the two prices in the economy. Findings: the fluctuation of the parallel exchange rate and its reaching 1240 dinars per dollar. Research, practical & social implications: work should be done to establish sovereign funds in which to be saved in times of high oil prices, to be resorted to in times of crisis. Originality/ Value: this experience is applicable in many oil countries as the Public Revenue Control Fund In Algeria and the Kuwaiti Fund for Future Generations.