CBJ raises interest rate by 25 basis points

AMMAN — The Central Bank of Jordan (CBJ) on Thursday decided to increase the interest rate of its various monetary policy instruments by 25 basis points, effective this Sunday, the Jordan News Agency, Petra, reported.

The CBJ’s open market operations committee decision was taken in line with the latest economic developments in the Kingdom, as well as changes in regional and international monetary markets. 

The changes are intended to address the pressures of inflation amid rising global inflation rates, which pushed the average inflation rate in Jordan to 4.2 per cent in 2022.

To guarantee the availability of appropriate financing for the 10 vital sectors of the economy, the CBJ decided to continue refinancing JD1.4 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 committee also extended the JD700 million programme supporting SMEs, professionals, craftspeople and basic commodity importers. The programme, originally intended to conclude at the end of February, has been extended until the end of April. The project’s interest rate will be maintained at no more than 2 per cent, with loans to be repaid in 54 months, including a grace period of up to 12 months, according to the committee.

The CBJ data showed that the Kingdom’s foreign currency reserves have maintained a high level of $17.2 billion, covering the Kingdom’s import demand for 7.5 months. 

Bank deposits in 2022 increased by JD2.6 billion to reach JD42.1 billion, marking an increase of 6.5 per cent. Credit facilities offered by banks showed an increase of JD2.6 billion, totalling JD32.6 billion at the end of 2022.

Jordan's tourism industry continued to improve, generating over JD4.1 billion in revenue in 2022, two times higher than 2021's figures.

National exports increased by 37 per cent during the first 11 months of 2022, Petra reported.

Foreign investments also went up by 93.6 per cent during the first three quarters of 2022 to reach JD629.3 million.

Remittances from Jordanians working abroad in 2022 went up by 1.5 per cent.

These developments pushed the real GDP growth rate up 2.7 per cent during the first three quarters of 2022, after recording a 2.2 per cent growth during the same period of 2021.

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