AMMAN — Governor of the
Central Bank of Jordan (CBJ) Adel Sharkas said that the fixed dinar-US dollar exchange rate,
in place since 1995, is “the best and most appropriate policy” for the
Jordanian economy, and a cornerstone for macroeconomic stability and sound
monetary and banking management.
اضافة اعلان
During a recent meeting with the members of
the Jordan and Amman Chambers of Commerce and representatives of the Jordanian
Businessmen Association, Sharkas emphasized the importance of the current
exchange rate policy in boosting the competitiveness of national exports and
fostering an investment-friendly climate, the Jordan News Agency, Petra,
reported.
Interest
rate hikeThe recent decision by the central bank to
increase the benchmark interest rate on monetary policy instruments aims to
keep inflation under control and maintain the allure of the dinar as a
competitive savings vehicle, thereby cementing the country's monetary
stability, he said, noting that current global forecasts consistently predict
interest rates will fall in 2024.
The
CBJ governor also stated that changes in
interest rates should not be reflected immediately on loans, but should take
three to six months, depending on the pricing cycle specified in the contract
between the borrower and the lender.
On this topic, he noted that the central bank
has increased the benchmark interest rate by 450 basis points since March 2022,
while lending rates at banks have increased by no more than 119 basis points.
Sharkas highlighted the
CBJ’s" comfortable" foreign reserve balance of JD17.2 billion, which is
enough to pay for the Kingdom's imports of goods and services for about 7.5
months. Following the interest-rate hike, the CBJ governor added,
dinar-denominated deposits with local banks grew by 7 percent to reach JD42.1
billion, while credit facilities picked up by 8.5 percent to reach JD32.6
billion.
Consumer
costsKhalil Haj Tawfiq, president of the Jordan
Chamber of Commerce, asserted that the rise in interest rates has increased the
cost of borrowing for citizens and business owners, and he urged the central
bank to ask commercial banks to delay loan payments for individual and business
borrowers before the month of Ramadan.
Haj Tawfiq also called on the
CBJ to maintain its funding for programs that assist importers of essential goods and to
maintain its commitment to small and medium-sized businesses.
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