Importance of monetary policy in maintaining the exchange rate – Fariz

Former Governor of the Central Bank of Jordan and former Deputy Prime Minister, Dr Ziad Fariz
Former Governor of the Central Bank of Jordan, Dr Ziad Fariz (File photo: Jordan News)
AMMAN — Former Governor of the Central Bank of Jordan and former Deputy Prime Minister, Dr. Ziad Fariz, affirmed the direct contribution of monetary policy to maintaining the exchange rate of the Jordanian Dinar. اضافة اعلان

In light of recent events such as the COVID-19 pandemic and the Russian-Ukrainian crisis, Fariz stated that monetary policy has successfully prevented the phenomenon of "dollarization."

Consequently, the Central Bank has maintained a policy of raising interest rates in line with the increase in the US dollar's interest rate, Hala News reported.

During a dialogue session organized by the Jordanian Economic Forum, Fariz highlighted the Central Bank's demonstrated ability to address inflationary pressures compared to other countries worldwide.

Additionally, the Central Bank has implemented measures to mitigate the pandemic's impact on the Jordanian economy, including the provision of liquidity and financial facilities to support affected sectors.

According to a statement from the forum on Monday, the dialogue session was part of the Economic Salon program, aimed at discussing the role of monetary policy in a changing world. Dr. Khair Abu Saileek, Chairman of the Forum's Board of Directors, was in attendance.

Fariz emphasized that the positive impact of monetary policy mechanisms and tools takes time to manifest in the market. Therefore, the Central Bank must continue with its current monetary policy approach, while focusing on supporting the private sector and earning its trust to attract further investments.

Faiq Hajazin, a member of the Forum's General Assembly, underlined the importance of monetary policy in addressing recent challenges in Jordan. He noted that the policy of raising interest rates contributes to maintaining monetary stability in the Jordanian economy.

Forum members discussed challenges arising from the increased interest rates, including the rising cost of conducting business. These challenges were acknowledged during the assembly, confirming the presence of numerous obstacles facing the Jordanian economy.

Dr. Fariz responded by acknowledging that the challenges faced by the national economy are a natural consequence of its interconnectedness with the global economy. He emphasized the Central Bank's efforts to provide investment opportunities.

Fariz affirmed that pegging the Dinar to the US dollar has fostered investor confidence in the stability of the exchange rate and monetary situation in Jordan. He also emphasized the role of fiscal policy in controlling government expenditures.

Read more Business
Jordan News