Global Journal of Economic and Finance Research

This research explores the relationship between documentary credits and foreign trade in Iraq. The analysis covers the period (2005-2022). Using econometric modeling techniques, specifically the Automated Regressive Integrated Moving Average (ARIMA) model, the results indicate that documentary credits have a positive impact on trade volume, with letters of credit representing approximately 67% of Iraq's foreign transaction volume. The study's results also demonstrate that letters of credit serve as a powerful mechanism for reducing transaction risks and strengthening relationships between Iraqi traders and their foreign counterparts. It is worth noting that this impact is noticeable in the development of foreign trade financing tools and methods, highlighting the importance of policies aimed at strengthening Iraq's foreign trade financing tools and legal systems, according to the ARIMA (1, 1, 1) model. Overall, the results of this study confirm the importance of documentary credits in growing Iraq's foreign trade volume and enhancing the confidence of foreign traders.

Documentary Credits, International Trade, Trade Finance.

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