Local News

The Central Bank raises interest rates on monetary policy tools by 75 basis points

Amman Today

publish date 2022-09-22 15:09:26

The Open Market Operations Committee of the Central Bank of Jordan decided to raise interest rates on all monetary policy instruments of the bank by 75 basis points, starting from Sunday 25/9/2022.

This decision comes in line with the Central Bank’s goal of maintaining monetary stability in the Kingdom, in addition to the bank’s full commitment to maintaining the attractiveness of the Jordanian dinar as a savings pool, in light of developments in global financial markets and interest rate developments.

The decision also comes in light of the persistence and expansion of external inflationary pressures, their impact on domestic inflation rates, and the conditions of uncertainty generated by the effects of the Russian-Ukrainian war and geopolitical risks.

In the interest of the Central Bank on the importance of achieving a balance between the goal of maintaining monetary stability, continuing to stimulate economic growth and mitigating the impact of raising interest rates on economic sectors, the Committee decided to continue to fix preferential interest rates for the Central Bank’s program to refinance vital economic sectors. And the number of 10 sectors, with a value of 1.3 billion dinars, at 1 percent for the beneficiary projects within the capital governorate, and 0.5 percent for projects in the rest of the provinces, and their continued stability throughout the 10-year loan period.

The committee also decided to extend the work of the Central Bank’s program to support small and medium-sized companies, professionals, craftsmen and importers of the wholesale sector of basic commodities, amounting to 700 million dinars, until the end of this year, while maintaining the interest rate for borrowers within this program at its current level, not exceeding 2%. For a period of 54 months, including a grace period of up to 12 months from the date of granting the financing, knowing that the financing within this program is also granted, according to the fixed interest rate for the duration of the loan.

It is noteworthy that the Central Bank, through these two programs, has financed about 7,825 projects, with a value of about 1,824 thousand and 900 dinars, and contributed to providing about 14,517 job opportunities, in addition to maintaining about 151 thousand jobs since the start of the Corona pandemic. The amount of funding available under the two programs is about 690.5 million dinars.

The Central Bank’s decision comes in light of the continued improvement in the performance of the monetary and banking sector indicators, as data for the available period of the current year indicate that the foreign reserves of the Central Bank amounted to 16.8 billion dollars, which is sufficient to cover 8.7 months of the Kingdom’s imports of goods and services, i.e. approximately Three times the internationally recognized rate of three months.

Deposits with banks increased by 1.7 billion dinars, bringing their balance to 41.2 billion dinars at the end of July 2022, while credit facilities granted by banks increased by 1.9 billion dinars during the same period, bringing their balance to 31.9 billion dinars.

Many economic indicators have achieved positive performance during the available period of the current year, especially those related to the external sector, especially tourism income, which rose during the first eight months of this year to $3.6 billion, compared to $1.4 billion during the same period of the year. Last year, with a growth rate of more than 161 percent, in addition to the growth of remittances of Jordanians working abroad by 0.8 percent during the first seven months of this year, and exports by 43.4 percent during the first half of the year.

And the Central Bank indicated that it will continue to comprehensively monitor all monetary, banking and economic developments, locally, regionally and internationally, and it will evaluate the impact of its decisions on inflation expectations and macroeconomic developments in the medium term, taking into account its previous decisions to raise interest rates, and it will not hesitate to use all its monetary tools to ensure the enhancement of monetary stability in The kingdom.

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Jordan News

Source : اخبار الاردن

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