CBI Reports Increase in Cash Credit to Total Deposits for Iraqi Banks

The Central Bank of Iraq has reported an increase in the cash credit to total deposits ratio for banks, rising from 51.9% in Q4 2023 to 59.3% in Q4 2024. This increase indicates that banks are better utilizing customer deposits for profit-making credit extensions, which may also include loans to the government and central bank.

On Tuesday, the Central Bank of Iraq (CBI) announced a notable increase in the cash credit to total deposits ratio for banks operating within the country. This ratio serves as a crucial indicator of bank liquidity, comparing the amount of credit extended by banks to their total deposits.

In the fourth quarter of 2024, this ratio rose to 59.3%, a significant increase from 51.9% recorded in the same quarter of the previous year. The CBI noted that this rise signifies that banks are effectively leveraging customer deposits to generate profits through credit provision.

Additionally, the CBI suggested that a portion of this increase might be attributed to heightened bank credit extended to the government and the central bank. This indication of enhanced liquidity management is critical for both banking stability and economic growth in Iraq.

The Central Bank of Iraq’s recent announcement of an increase in the cash credit to total deposits ratio highlights an important shift in the banking sector. The rise from 51.9% to 59.3% suggests improved bank profitability and efficient utilization of deposits, potentially benefiting the economy through increased lending. This development reinforces the role of banks in supporting both governmental needs and market activities.

Original Source: ina.iq