Iraqi bank deposits gain $1.57B while lending shrinks

Shafaq News- Baghdad

Deposits in Iraq's banking system recovered in August after a sharp fall the month before, while lending kept shrinking, according to Central Bank of Iraq (CBI) data released on Thursday. The figures point to tight liquidity across the sector this year.

Total deposits rose about 2% to 103.065 trillion dinars (about $78.7 billion) at the end of August, up from 101.008 trillion dinars ($77.1 billion) in July, which had seen a 3.7% drop. The gain was not enough to recover earlier losses. Deposits remain 7.2% below their level at the end of 2025, a shortfall of 8 trillion dinars ($6.1 billion).

Households and businesses hold almost half of the total. Private-sector deposits stood at 48.751 trillion dinars ($37.2 billion), central government deposits at 30.447 trillion dinars ($23.2 billion) and public institution deposits at 23.867 trillion dinars ($18.2 billion).

Credit fell for another month. Total cash lending slipped by 172 billion dinars ($131 million) to 71.261 trillion dinars ($54.4 billion), leaving it 5.7% below where it ended 2025. Most of the lending went to the private sector, which accounted for 46.810 trillion dinars ($35.7 billion). The central government received 22.039 trillion dinars ($16.8 billion), and public institutions 2.412 trillion dinars ($1.8 billion).

Lending has slowed this year as state banks struggle with liquidity. By September, most had suspended loans and salary advances. On Oct. 19, Finance Minister Falih Al-Sari ordered the state-owned Rafidain Bank, the country's largest lender, to resume lending to public employees and expand financing for private businesses.

The data covers the period before Iraq devalued the dinar on Oct. 7, raising the official selling price of the dollar to 1,520 dinars from 1,320.