The Impact of Interest Rates on the Volume of Bank Deposits in Iraqi Public and Private Banks

Abstract

This study aims to analyze the impact of interest rates on the volume of bank deposits
in public and private banks in Iraq during the period 2010–2023. The analysis relies
on annual data derived from the reports of the Central Bank of Iraq, covering
variables such as interest rates and the average volume of deposits in both public
banks (Al-Rafidain, Al-Rasheed, and the Trade Bank of Iraq - TBI) and private banks
(Byblos, Gulf Bank, Iraqi National Bank, and International Commercial Bank). The
findings indicate a weak positive correlation between interest rates and deposit
volume in public banks, whereas the relationship is notably stronger in private banks.
Simple linear regression models were employed to examine the quantitative
relationship between the variables, providing an analytical framework for
understanding depositor behavior and their interaction with monetary policy tools.
The study concludes with a set of recommendations aimed at enhancing the
effectiveness of monetary policy instruments and improving the efficiency of the
banking sector in attracting deposits.