Abstract

The main objective of the research is to identify the nature and direction of the relationship between exchange rate fluctuations and liquidity ratios for commercial banks, through the exchange rate data series, as well as a series of liquidity ratios data for commercial banks that suffer from the problem of instability during the research period, from here the first objective of the research It is to identify the ability of the Central Bank of Iraq to maintain the stability of the Iraqi dinar exchange rate, as well as to shed light on one of the risks to which the banking system is exposed, namely, liquidity ratios. By relying on published data on the two variables for the period from 2014 to 2018, the variables were analyzed and tested using the (EViews10) and (SPSS23) program from the Pearson correlation test, and the simple linear regression test. Liquidity for commercial banks operating in Iraq, and the corresponding proposal was, “The Central Bank should work to reduce exchange rate fluctuations in order to increase stability in bank liquidity ratios”.