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Jordan's foreign currency reserves reach $18 billion — CBJ

By JT - Jan 17,2024 - Last updated at Jan 17,2024

AMMAN — Foreign exchange reserves, currently at $18 billion, are considered to be at a comfortable and reassuring level, sufficient to cover 7.8 months of the Kingdom's imports of goods and services,  Adel Sharkas, governor of the Central Bank of Jordan (CBJ), said on Tuesday.

During a meeting of the Senate's Finance and Economy Committee, chaired by Rajai Muasher, focusing on monetary policy, Sharkas said that Jordan has one of the lowest inflation rates in the world, at 2.1 per cent over the past year, compared with over 4 per cent in 2022.

He highlighted an increased demand for the Jordanian dinar, as the "dollarisation" rate fell to 18.0 per cent by the end of November last year, a significant reduction from levels of over 20 per cent prior to the COVID-19 pandemic.

Despite a 5.25 basis point increase in interest rates since March 2022, the weighted average interest rate on loans increased by 216 basis points, representing only 41.1 per cent of the total increase implemented by the CBJ, he said, noting that this suggests that commercial banks did not fully match the central bank's increase in lending rates. He also stressed that the interest rate spread between loans and time deposits is currently 3.06 per cent, the lowest in 26 years.

Commending the vital role of the banking sector in the national economy, he noted that annual bank facilities reached around JD997 million, totalling JD33.4 billion by November last year, while deposits in banks increased by JD1.2 billion to reach JD43.3 billion, reflecting confidence in the banking sector.

He also emphasised that the economic impact of the war on Gaza in 2023 was limited, stressing that the outlook for 2024 depends on the duration and extent of the crisis,expressing confidence that the national economy has the experience and tools to face the crisis and emerge from it with minimal costs.

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