Economy News – Baghdad
The Iraqi banking sector has witnessed significant changes in its financial indicators during the past year, according to the issued data, which reflect the performance of commercial banks, the movement of cash, and the purchases and sales of the dollar, in addition to the policies of the Central Bank.
Commercial banks: decline in some assets and growth in private deposits
The data showed a decline in the assets of commercial banks by 0.92%, falling from 205.25 trillion dinars by the end of 2023 to 203.36 trillion dinars at the end of 2024. Current deposits also recorded a decrease of 9.38%, while private deposits increased by 10.63%, indicating increased trust of individuals in private banks compared to traditional current deposits.
Dollar movements: a sharp decline in central bank purchases
The Central Bank’s purchases of the dollar recorded a significant decline of 61.97%, falling from $8.35 billion to $3.18 billion. In contrast, dollar cash sales saw a slight decline of 0.92%, reflecting a decline in demand for hard currency within local markets.
Currency: decrease in the money supply and decline in the reserves of the issued currency
The issued currency recorded a decrease of 1.36%, while cash outside banks decreased by 10.26% to reach 130.35 trillion dinars compared to 145.26 trillion dinars in the previous year. The ratio of mandatory reserves to the issued currency also decreased from 143.14% to 129.64%, indicating a reduction in cash availability in the market.
Central Bank: A rise in loans and a decrease in gold reserves
Loans granted to small and medium-sized enterprises witnessed a significant increase of 47.02%, reflecting a trend to support economic development through project financing. In contrast, gold reserves recorded a decline of 8.69% to reach 189.90 trillion dinars compared to 207.96 trillion dinars last year.
Inflation and the exchange rate: a marked decline
The inflation rate recorded a decline of 35.56%, falling from 4.50% to 2.90%, reflecting an improvement in price stability. The exchange rate in the parallel market also fell by 1.32%, in an indication of relative stability in the value of the dinar against the dollar
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