The Central Bank of Iraq announced an increase in the credit-to-deposit ratio for banks, rising from 51.9% to 59.3% in Q4 of 2024. This metric is vital for evaluating bank liquidity, and the rise indicates banks are effectively using deposits to issue credit. Part of this increase may result from growing credit to the government and central bank.
On Tuesday, the Central Bank of Iraq (CBI) reported an increase in the credit-to-deposit ratio among banks operating in Iraq. This ratio, a crucial metric for assessing bank liquidity, reflects the proportion of credit extended compared to total deposits. In the fourth quarter of 2024, the ratio rose to 59.3%, up from 51.9% in the previous year’s fourth quarter according to the statement from CBI received by the Iraqi News Agency (INA).
The CBI elaborated that this upward trend suggests that banks are successfully leveraging their customers’ deposits to generate profits through credit issuance. Additionally, it is likely that some part of this increase is attributable to the higher levels of bank credit extended to both the government and the central bank.
In conclusion, the Central Bank of Iraq has highlighted a significant improvement in the credit-to-deposit ratio for banks, indicating that they are effectively utilizing deposits to extend credit. This increase may also reflect heightened banking support for governmental needs. Monitoring these trends will be essential to assess ongoing financial health and liquidity in the sector.
Original Source: ina.iq
