<![CDATA[General Background Financial market anomalies across global exchanges frequently distort asset pricing and investor behavior during holiday periods. Specific Background In emerging economies like Iraq, understanding whether public holidays trigger abnormal returns in stock indices and parallel foreign exchange rates is vital for evaluating market efficiency. Knowledge Gap Existing literature rarely examines stock market indices and foreign exchange movements simultaneously within a unified empirical framework under managed auction mechanisms. Aims This study analyzes the impact of seventy-five official holidays on the Iraq Stock Exchange index and the Iraqi dinar parallel exchange rate from 2017 to 2022. Results Event study analysis using parametric t-tests reveals no statistically significant cumulative abnormal returns for either asset class around scheduled holidays, despite temporary initial reopening illiquidity in stock trading. Novelty The empirical findings demonstrate that the Iraqi market lacks a traditional holiday anomaly due to efficient information absorption and proactive central bank currency auctions. Implications Portfolio managers should avoid short-term seasonal timing strategies, focusing instead on fundamental firm evaluation. Keywords Holiday Effect, Exchange Rate, Iraq Stock Exchange, Event Study, Market Efficiency Key Findings Highlights Official holidays produce no statistically significant cumulative abnormal returns in the Iraqi stock index or parallel exchange rate. The Iraq Stock Exchange displays a brief reopening illiquidity drop followed by a positive trading rebound on the third post-holiday day. Proactive central bank currency auction sales effectively neutralize seasonal foreign exchange volatility during bank closures.]]>
