Objectives The research aims to demonstrate the role of financial discipline and digital transformation in enhancing the Central Bank of Iraq's efficiency in managing foreign reserves. This is achieved by measuring the impact of financial discipline and digital transformation indicators on the foreign reserves adequacy index for the period (2004-2024). Methodology This research relies on a combination of the descriptive-deductive approach to present the economic concepts related to the research variables, and standard quantitative methods to test the research hypothesis using time series data comprising 20 observations for the period (2004-2023), using the ARDL cointegration methodology. Findings The most important finding of the research is the existence of a long-term equilibrium relationship moving from the independent variables (financial discipline and digital transformation indicators) toward the dependent variable, which is the subject of the research (the Central Bank's efficiency index in managing foreign reserves in Iraq). The error correction parameter showed that it was negative, less than one, and statistically significant, indicating that the imbalance in the short term is automatically corrected over time, returning to a state of equilibrium in the long term. This is consistent with the research hypothesis. Conclusions The research concluded with a set of recommendations, the most important of which is the need for the government to adopt a disciplined fiscal policy that focuses on controlling public expenditures and the general budget deficit, directing them toward safe and sustainable levels, which supports It enhances the Central Bank's ability to manage and stabilize foreign reserves.
Awad et al. (Mon,) studied this question.
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