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Central bank raises main interest rate by 25 basis points

By JT - Dec 15,2016 - Last updated at Dec 15,2016

AMMAN — The Central Bank of Jordan (CBJ) on Thursday increased its main interest rate, the Jordanian dinar overnight deposit rate, and the rate of one-week deposit certificates by 25 basis points as of Sunday, December 18. 

The CBJ, through its open market operations committee, decided to maintain the interest rates of rediscount and of overnight repurchase agreements, the Jordan News Agency, Petra, reported. 

The CBJ's decision was based on its continuous monitoring of local, regional and international economic developments, especially those in international financial markets, which can influence the interest rates of some regional and international currencies. 

The CBJ's main interest rate (one-week repurchase agreements) will rise to 2.75 per cent annually, and the Jordanian dinar overnight deposit rate will change to 1.75 per cent annually, while the rate of one-week deposit certificates will range between 2.5 and 2.75 per cent.

The annual interest rates of rediscount and of overnight repurchase agreements will remain at 3.75 and 3.5 per cent respectively.

The central bank decided to maintain banks’ interest rates of medium-term loan programmes — which primarily refinance the economic sector’s small- and medium-sized projects — at 1.75 per cent in Amman and 1 per cent in other governorates. 

These decisions are in line with the CBJ’s aims of guaranteeing the competitiveness of the Jordanian dinar as a tool for local savings, and of preserving monetary and financial stability, the CBJ said.

The bank stressed that it will continue taking all necessary steps to achieve its policy goals and to create an environment that attracts local and foreign investments, which it hopes will consequently help the reasonable growth of national economy 

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