The Open Market Committee of the Central Bank of Jordan has decided to raise interest rates by 50 basis points on all monetary policy instruments.
The bank said in a statement Thursday that it has eliminated the interest rate for the one-day deposit window, which it has decided to raise by 75 basis points, on the condition that the decision applies from next Sunday.
He explained that his decision was made “in light of the central bank’s strong commitment to strengthening the foundations of monetary stability, maintaining the attractiveness of the Jordanian dinar as a savings pool, and increasing deposits, which constitute one of the inflows to meet the financial needs of the economy.”
This is also happening “in light of growing external inflationary pressures and, as a result, rising interest rates prevailing in international and regional financial markets, and aimed at ensuring that the cost of borrowing by banks in the market remains within acceptable levels.”
He also decided to maintain a fixed preferential interest rate for the duration of the loan for the Central Bank’s 1.3 billion dinars ($1.83 billion) refinancing program for 10 vital sectors of the economy.
The interest rate for these sectors is 1% for projects in the Capital Province and 0.5% for projects in the remaining provinces for a period of 10 years, as the funding currently available for lending under this program exceeds $900 million.
Available monetary, economic and banking data indicate that the volume of foreign exchange reserves of the Central Bank currently stands at $17.5 billion, which is enough to cover the import of goods and services of the Kingdom for a period of 9.1 months.
Source: El Iktisad
