Central bank signals lower interest rates

AMMAN — The Central Bank of Jordan (CBJ) decided to reduce the interest rates on key monetary policy tools by 50 basis points as of Wednesday.

Under the CBJ decision, the deposit window interest rate will drop by 50 basis points  to 2.75 per cent  and the one week (or more) repurchase agreement rate will drop by 50 basis points to 3 per cent, annually.

However, the rediscount rate and the overnight repurchase agreement rate will remain unchanged at 4.25 per cent and 4 per cent, respectively.

The CBJ attributed its decision to the continued improvement in the most basic variations of the national economy, besides expectations of an inflation rate remaining at a suitable level and the increasing attractiveness of savings tools in Jordanian dinar. 

Also, the improvement in the current account of the balance of payments was another factor which reflected on foreign reserves reaching record and comfortable levels. 

The CBJ expressed hope that its decision to reduce interest rates will stimulate the investment environment and provide sufficient credit at lower costs to various economic activities in order to reflect positively  on economic growth and employment in the country. 

The CBJ said it will continue to follow up on economic and financial indicators at domestic and global levels and take appropriate measures, accordingly, in a manner that strengthens financial and monetary stability and boosts an investment favourable environment.