CBJ announces 75 basis point interest rate increase

AMMAN — The Central Bank of Jordan (CBJ) on Thursday decided to increase the interest rate of its various monetary policy instruments by 75 basis points, effective this Sunday, September 25.

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 the rising global inflation rates.

To guarantee the availability of appropriate financing for vital sectors in the economy, the CBJ 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, with a loan term of 10 years for all projects, according to the statement.

The committee also extended the JD700 million programme supporting SMEs, professionals, craftspeople and basic commodity importers until the end of the year. The interest rate for this project 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.

Through these two programmes, the CBJ has financed some 7,825 projects at a financing volume of JD1,824,900.  This endeavour has helped create 14,517 jobs, and has preserved about 151,000 jobs since the outbreak of the pandemic.

The amount of funding available under the two programmes currently stands at approximately JD690.5 million.

The data also showed that the Kingdom’s foreign currency reserves presently total $16.8 billion, covering the Kingdom’s import demand for 8.7 months. 

By the end of July, bank deposits increased by JD1.7 billion to reach JD41.2 billion. Credit facilities offered by banks showed an increase of JD1.9 billion during the same period, totalling JD31.9 billion.

Jordan's tourism industry continued to improve during the first eight months of 2022, recording a 161 per cent increase to reach $3.6 billion in revenue, compared with $1.4 billion in the same period of 2021. National exports increased by 43.4 per cent during the first half of 2022.

Remittances from Jordanians working abroad during the January-July 2022 period went up by 0.8 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, the statement added.