CBJ raises interest rate by 50 basis points

AMMAN — The Central Bank of Jordan (CBJ) on Sunday decided to increase the interest rate of its various monetary policy instruments by 50 basis points, effective this Monday, December 19.

To guarantee the availability of appropriate financing for vital sectors in the economy, the CBJ’s open market operations committee decided to continue refinancing JD1.3 billion in programme interest rates, which remain unchanged at 1 per cent for projects based in Amman and 0.5 per cent for projects located in other governorates. 

The interest rate will remain stable within the 10-year loan term for all projects, the Jordan News Agency, Petra, reported.

The CBJ’s refinancing programme of vital economic sectors currently serves 10 sectors.

The committee also decided to extend the CBJ's programme at a cost of JD700 million to support SMEs, professionals, craftspeople and basic commodity importers for another two months, until the end of February 2023, Petra reported. 

The committee also decided to stabilise interest rate with CBJ's programme at a rate no more than 2 per cent.

The CBJ’s open market operations committee decision was taken in line with interest rate changes in the regional and international monetary markets. The changes are intended to address the pressures of inflation amid rising global inflation rates.

The annual inflation rate in Jordan in November 2022 hit 5 per cent, bringing the average inflation rate to 4.2 per cent during the first 11 months of the year, compared with 1.2 per cent during the same period of 2021.

The data also showed that the Kingdom’s foreign currency reserves stand at a high level, totalling $16.7 billion, covering the Kingdom’s import demand for 8.7 months. 

During the first 10 months, bank deposits increased by JD2.4 billion to reach JD41.9 billion by the end October, marking an increase of 6.1 per cent. 

Credit facilities offered by banks showed an increase of JD2.3 billion during the same period, totalling JD32.3 billion.

Jordan's tourism industry continued to improve during the first 11 months of 2022, recording a 115 per cent increase to reach $5.3 billion in revenue, compared with $2.5 billion in the same period of 2021. 

National exports increased by 44 per cent during the first three quarters of 2022, Petra reported.

Foreign investments also went up by 96.9 per cent during the first half of the year. 

Remittances from Jordanians working abroad during the January-October 2022 period went up by 0.6 per cent.

The CBJ will continue to monitor local, regional and global economic developments, and will stand ready to act proactively to support monetary stability.