Prof. Mohammed Saleh Salman Al-Kubaisi Teacher Dr. Ammar Hamad Khalaf
This research aims to test the causal relationship between the rate of inflation and the exchange rate in the Iraqi economy for the period 1980-2009. The Autoregressive Distributed Lag Model ARDL was used to test the long-term and short-term causal relationship between inflation and the exchange rate. Through the results, this research found that there is no reciprocal relationship between the rate of inflation and the exchange rate in the Iraqi economy. However, there is a one-sided relationship that tends from the exchange rate to the rate of inflation in the short term only.