CBJ lowers interest rate, prompted by positive monetary indicators

AMMAN — The Central Bank of Jordan (CBJ) on Thursday decided to lower the interest rate on all monetary policy instruments by 25 basis points, effective as of Sunday, August 4.

The bank said the decision was taken in line with interest rate changes in international and regional markets, the Jordan News Agency, Petra, reported, citing a CBJ statement. 

The move also aims at enhancing the credit facilities granted to economic sectors as well as stimulating local spending, according to the statement.

The decision was also made in light of a low inflation rate and an outlook predicting the same level of inflation throughout 2019.

The move was also prompted by an improvement in the balance of payments, a drop in the trade balance deficit and positive readings of monetary indicators such as high deposits and facilitations made to the private sector, along with the CBJ’s relatively high level of foreign currency reserve, according to the statement.

However, the CBJ, in a customary decision, decided to maintain interest rate as is for entrepreneurs who borrow under a soft-financing programme that aims to boost the economy through financing SMEs in a set of designated sectors. 

The current interest rate level under the programme is 1.7 per cent for projects in Amman and 1 per cent for those started in governorates. 

CBJ has financed some 1,088 projects with a total value of JD720 million under the soft-financing programme, to which a sum of JD1.2 billion is allocated. 

These schemes have contributed to providing more than 10,000 jobs across the Kingdom, according to the CBJ.

The CBJ said that it would continue to follow up closely on local and international economic developments and take proper procedures that guarantee enhanced monetary and financial stability in the Kingdom, according to the statement.