AMMAN — The
Central Bank of Jordan’s open market operations committee decided to increase the interest rate on its monetary policy instruments by 25 basis points (bps) as of March 20, 2022, in a bid to maintain
the monetary and financial stability in the Kingdom and the value of assets in
Jordanian dinars against other currencies, according to Khaberni News.
اضافة اعلان
The CBJ committee took the decision
in view of the continuous increase of the interest rates, and of the economic
local, regional, and international developments. Also, the CBJ seeks to contain
inflation, in light of the global increase of interest rates, which reached
high levels due to the gradual recovery from the COVID-19 repercussions and to
the imbalance in the supply chains, according to the CBJ statement.
The global geopolitical uncertainties
added more pressure on the global prices and supply chains, the statement
added.
In light of the CBJ’s keenness to
maintain the financial stability and contribute to enhancing the economic
growth and creating opportunities, the committee decided to extend the
refinancing program, at the amount of JD1.3 billion, for 13 dynamic economic
sectors. They include industry, tourism, renewable energy, agriculture, IT,
engineering consultations, health, transport (transport companies), education
(vocational, creative, and technical), and the exporting sectors.
The committee also decided to
sustain the CBJ’s program to support small and medium enterprises,
professionals, and craftsmen with JD700 million, while keeping the interest
rate for debtors at 2 percent at most, divided over 54 months, with a grace period
reaching up to 12 months.
In light of the current
circumstances, and to provide people with basic commodities, the committee,
along with the Ministry of Industry, Trade, and Supply, agreed to raise the
price cap of the loans provided to retail importers of those commodities from
JD600,000 to JD1 million.
The bank statement said that the CBJ
adopted an exceptional facilitative monetary policy during COVID-19, whereby it
cut the interest rate by 150 bps in March 2020, deeming the CBJ’s main interest
rate to hit 2.5 percent, citing the minimum rate in 10 years.
In 2021 and during January and
February 2022, the monetary, economic, and banking indicators showed positive
performance. The foreign reserve volume of the CBJ currently amounts to $180
billion, which is enough to cover the Kingdom’s imports of goods and services
for 9.4 months.
The inflation rate in January and
February 2022 reached 2.2 percent, while the GDP increased by 2.1 percent
during the first three quarters of 2021.
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