The Open Market Operations Committee of the Central Bank of Jordan decided to raise interest rates on all monetary policy instruments of the Central Bank by 25 basis points, as of next Sunday.

During the meeting, the committee discussed the performance of the national economy, the latest monetary and banking developments in the Kingdom, and their implications for the expected performance for the year 2023.

The committee discussed global economic developments, the performance of financial markets, and interest rate trends, and in order to preserve the strong and well-established foundations of monetary and banking stability in the Kingdom and to preserve the attractiveness of the Jordanian dinar, the committee decided to fix interest rates on loans granted by banks within the “Central Bank Program for Refinancing Vital Economic Sectors,” numbering ten. sectors, amounting to 1.4 billion dinars at 1.0 percent for beneficiary projects within the Capital Governorate and 0.5 percent for beneficiary projects in the rest of the Kingdom’s governorates.

The committee also decided to extend the work of this program until the end of March 2024, due to its importance in supporting the gradual recovery of the Jordanian economy, contributing to providing more job opportunities, and ensuring the provision of sufficient financing for the targeted economic sectors on soft lending terms.

The committee fixed the interest rate on loans granted by banks through the “Central Bank Program to Support Small and Medium Enterprises, Professionals, Craftsmen and Importers of the Wholesale Trade Sector of Basic Commodities” at a volume of 700 million dinars at its current level, which reaches a maximum of 2 percent for borrowers, as financing is granted according to the interest rate. Fixed interest for 54 months, including a grace period of up to 12 months, noting that the committee had decided in its previous meeting to extend the work of this program until the end of April 2023.

The committee’s decisions also come to contain inflationary pressures, in light of the increase in the inflation rate in the Kingdom during the past year to 4.2 percent, and during the first two months of this year it reached 4.0 percent, driven by the increase in the “basic inflation” rate that recorded during the same period 4.3 percent.

The Committee affirms the solid performance of all monetary, banking and economic indicators in the Kingdom, as revealed by the latest available data, foremost of which are the foreign reserves of the Central Bank, which have maintained their high level of $16.7 billion, and are sufficient to cover the Kingdom’s imports of goods and services for a period of 7.3 months, as well as deposits with Banks that recorded an annual increase at the end of January 2023 by 6.1 percent, or an amount of 2.4 billion dinars, to reach 42.0 billion dinars, and credit facilities, which recorded an annual increase during the same month, by 8.9 percent, or an amount of 2.7 billion dinars, to record 32.9 billion dinars added to This is the solidity of the banking system and its resilience according to the latest “financial safety indicators” that confirmed its enjoyment of high capital adequacy, liquidity and profitability, and at the same time a decrease in non-performing debts, which was offset by an increase in the coverage ratio of provisions for them.

Tourism income exceeded its levels achieved before the pandemic, exceeding 4.1 billion dinars in 2022, and continued its strong performance during the first two months of this year, recording a growth of 122.7 percent, compared to the same period last year, and national commodity exports increased by a remarkable rate of 33.8 percent in 2022. 2022.

Initial Central Bank estimates indicate an increase in foreign direct investment inflows into the Kingdom last year to $1.1 billion, a growth of 83.0 percent over what it achieved in 2021, which significantly exceeds previous expectations, and the increase in remittances of Jordanians working abroad by 1.5 percent last year. , and an increase of 0.9 percent in January 2023.

All of this was reflected in the rise in the real growth rate in the national economy to 2.7 percent during the first three quarters of 2022, compared to 2.2 percent for the same period of 2021. The national economy is expected to maintain the same high growth rate during the entire year 2022.

The Central Bank confirms its close follow-up of all incoming data and local, regional and international economic developments, and will take appropriate measures to enhance monetary, banking and financial stability in the Kingdom.

-(Petra)