The Role of Digital Inclusion in Promoting Bank Savings and The Stability of The Money Supply (M2) In The Iraqi Economy: An Econometric Study For The Period (2004-2023)

The study examines the effects of financial digitization indicators on domestic liquidity and savings in the Iraqi economy during 2004-2023. Digital inclusion indicators refer to the coverage of financial services, individuals' access to financial services, and the use of digital payment and savings tools. All these have a positive influence on banking operations efficiency and the Iraqi economy. Economic and econometric analysis of the impact assertion was carried out using E Views 12 software. It was observed that digital inclusion and internet usage have a positive relationship with domestic liquidity. However, internet usage and ATM usage did not have a positive relationship with domestic liquidity in Iraq. Similarly, financial digitization had a positive relationship with savings; however, mobile phone usage, internet usage, and ATM usage had a negative relationship with savings. The savings variable had a steady increase during the study period, which indicates that it faces significant challenges in its operation. Thus, it is important to have a policy that ensures financial digitization has a positive influence on domestic liquidity. It should counteract challenges arising from high usage of mobile phones for non-productive activities that reduce financial flow or circulation in the economy. It is important to investigate and find a solution to counter negative influences of mobile phones, internet usage, and ATMs on savings. All these would help increase savings in the economy. It is a core base for productive investment. It also indicates a gap in savings awareness in the Iraqi economy. It is important to create banking literacy for individuals. It should increase confidence levels that would have a positive influence on savings. It would lead to a genuine or productive increase in savings.