Central bank raises interest rates again

AMMAN — The Central Bank of Jordan's (CBJ) open market operations committee on Thursday hiked the main interest rate and the interest on finance policy tools by 25 basis points as of Sunday, March 19, the Jordan News Agency, Petra, reported.

The  decision, the second in four weeks, was taken in line with the regional and international monetary markets' interest rates changes, to preserve the financial and monetary stability of the Kingdom including the stability of prices, the bank said.

Under the decision, the main interest rate at the CBJ will become 3.5 per cent annually and the Jordanian dinar overnight deposit rate 2.5 per cent.

The rate of one-week deposit certificates will range between 3.25-3.35 per cent annually, Petra reported, adding that interest rates of overnight repurchase agreements have become 4.25 per cent annually.

Moreover, the interest rate of rediscount stands at 4.5 per cent.

Meanwhile, the CBJ, again, kept interest rates unchanged with regards to refinancing programmes targeting tourism, agriculture, renewable energy and IT sectors, with the interest rate remaining 1.75 per cent for projects within the capital and 1 per cent for projects in other governorates, keeping the loan payback period at 10 years.

The bank said it would continue following up on economic developments in the local, regional and international spheres, to adjust  monetary and finance decisions in order to boost monetary stability and create an environment attractive for local and foreign investments. The change also seeks to  help the national economy in achieving reasonable growth rates.

Officials have said that raising the interest rate is meant to increase the attractiveness of deposits in dinar. 

The International Monetary Fund (IMF) has commended the recent steps by the CBJ in raising key monetary policy rates, decisions which have helped preserve the attractiveness of the Jordanian dinar and keep international reserves at adequate levels.