The Impact of Digital Currencies on Inflation and Interest Rates: An Applied Study in Iraq for 2018-2022
Abstract
The study sought to identify digital currencies, their nature, emergence, and how to issue them, as well as the mechanisms of trading and investing in digital currencies in currency markets. The research problem was represented by the main question, which states, (What is the nature of the relationship and impact between digital currencies, inflation, and interest rates? The study included six of the most famous digital currencies in the markets for a period of 2018–2022, based on monthly closing price data. The study reached a set of conclusions, the most important of which were the existence of a direct relationship between digital currencies and inflation, an inverse relationship between digital currencies and interest rates, and a positive relationship between digital currencies and inflation. Interest rates on digital currencies have a greater influence on inflation.
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