Iraq’s bank deposits recorded another sharp decline during the first half of 2026. Iraqi bank deposits fell by 6.19 trillion Iraqi dinars, according to Central Bank of Iraq data. The decrease pushed total deposits to their lowest level in several recent years.
Total deposits reached 104.875 trillion dinars by the end of June. That figure represents a 5.6% decline from the 111.065 trillion dinars recorded at the end of December 2025. The latest figures continue a longer downward trend that has reduced the banking system’s deposit base since 2023.
Deposits stood at 123.327 trillion dinars at the end of 2024. They had reached 133.499 trillion dinars one year earlier. The latest decline therefore reflects a sustained reduction rather than a short-term movement during the first half of this year.
Private-sector customers continued to account for the largest portion of deposits. Their holdings totaled 49.964 trillion dinars at the end of June. Central government accounts held 31.426 trillion dinars, while public institutions accounted for another 23.485 trillion dinars.
The distribution highlights the important role of businesses and private customers within Iraq’s banking sector. At the same time, government and public-sector balances remain a major source of funds. The continued reduction across total deposits could influence liquidity and lending activity throughout the financial system.
Cash credit also declined during the same period. Outstanding credit fell by 4.073 trillion dinars, or 5.4%, compared with the end of 2025. The balance dropped from 75.584 trillion dinars to 71.511 trillion dinars by the end of June.
Private-sector borrowers received the largest share of outstanding credit. Lending to private businesses and customers reached 46.687 trillion dinars. Credit extended to the central government totaled 22.419 trillion dinars, while public institutions received 2.405 trillion dinars.
The simultaneous decline in deposits and credit points to weaker banking activity during the period. Lower deposits can limit the funds available for banks to extend new loans. However, the figures alone do not explain whether demand, liquidity conditions, or other factors drove the changes.
The Central Bank of Iraq’s figures provide a broader picture of financial activity during the first half of 2026. Iraqi bank deposits now remain well below their levels from previous years. The continued decline will likely keep attention focused on banking liquidity and credit conditions.
For Iraq’s financial sector, restoring stronger deposit growth could become increasingly important. A deeper deposit base can support lending and improve banks’ capacity to finance economic activity. The latest data instead shows that Iraqi bank deposits remain under pressure as the year moves into its second half.