CBJ raises interest rate on monetary policy instruments by 75 basis points

AMMAN — The Central Bank of Jordan (CBJ) on Thursday decided to increase the interest rate on its various monetary policy instruments by 75 basis points, effective as of Sunday, July 31.

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

To guarantee the availability of appropriate financing for vital sectors in the economy, the CBJ decided to keep the refinancing JD1.3-billion programme’s interest rates unchanged to stand at 1 per cent for projects located in Amman and 0.5 per cent for projects located in other governorates, with a loan term of 10 years, according to the statement.

The committee also decided to maintain the interest rate of the JD700-million programme, aimed to support SMEs, professionals and craftspeople and importers of basic commodities, at no more than 2 per cent, with loans to be repaid in 54 months, including a grace period of up to 12 months.

The data also showed that the Kingdom’s foreign currency reserves currently stand at $16.7 billion, which covers the Kingdom’s imports for 8.7 months. 

Bank deposits, by the end of May, continued to hike, recording an annual increase of 7.5 per cent, while credit facilities offered by banks showed an annual growth of 5.8 per cent by the end of May.

Jordan's tourism revenues jumped by 242.7 per cent during the first half of 2022, compared with the same period of 2021, while national exports increased by 43.4 per cent during the first five months of 2022.

The remittances of Jordanians working abroad in the January-May period of 2022 went up by 2.9 per cent, at a time the inflation rate stood at 3.3 per cent in the first half of this year.

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