The decision by Jordanian banks not to raise interest rates on existing individual loans, despite the Central Bank raising interest rates by 25 basis points, carries important economic and social significance, at a time when households face mounting livelihood pressures and growing challenges in managing their incomes and financial obligations.
اضافة اعلان
The decision is not merely a banking procedure related to lending rates, but reflects, in part, how the banking sector engages with the economic and social conditions of society, and its ability to strike a balance between profitability requirements and customers' interests, at a time when individual indebtedness reached 14.31 billion dinars by the end of the first quarter of 2026.
The Central Bank's interest rate hike comes within the monetary policy tools aimed at preserving monetary and financial stability, boosting the dinar's attractiveness, and managing economic variables, with foreign reserves reaching 28.38 billion dollars by the end of August 2026. However, the fact that the increase was not passed on to existing individual loans indicates that banks possess a degree of flexibility in managing the cost of their funds and their profit margins, allowing them to absorb the limited increase without placing additional burdens on borrowers.
This flexibility rests on multiple banking factors, including liquidity levels, the cost of deposits, competition among banks, and the nature of credit portfolios, with deposits reaching 51.1 billion dinars by the end of June 2026. Protecting customers' repayment capacity and preserving loan quality also represents a direct banking interest, not merely a social consideration.
On the street level, the decision eases concerns over rising monthly installments and preserves part of households' purchasing power, with inflation reaching 2.2 percent during the first eight months of 2026, and may support confidence in the banking sector.
In an economy that relies on domestic demand, avoiding an increase in debt burdens can help curb pressure on consumption and strengthen individuals' financial stability.
Here the social responsibility of Jordanian banks comes to the fore, extending beyond financing economic activity and banking services. In recent years, the banking sector has played a role in supporting projects and initiatives in health, education, and social welfare, alongside assistance and grants directed toward entrepreneurial ventures.
The banks also launched an initiative to support the education and health sectors with a total value of 90 million dinars over three years, at a rate of 30 million dinars annually, with actual payments reaching 24.7 million dinars by the end of April 2026.
From this standpoint, holding interest rates steady on existing individual loans can be read as a decision aligned with a broader concept of banking responsibility, provided it rests on sustainable financial foundations rather than temporary decisions that could later affect the soundness of banks or the cost of financing, with capital accounts reaching 8.08 billion dinars by the end of June 2026.
Ultimately, the Central Bank's decision and the banks' decision can complement one another within a framework of economic stability. What is required is not only protecting borrowers from increases, but also enhancing transparency, supporting responsible financing, and continuing to direct social responsibility toward sectors that achieve sustainable economic and social impact, such as the banks' initiative that covered 19 schools in 10 governorates through March 2026.
