Jordan’s ranking third globally in the Economic Freedom of the World report’s “Sound Money” index, with a score of 9.59 out of 10, is more than an improvement in an international ranking. It reflects the Central Bank of Jordan’s ability to manage monetary policy instruments within an integrated framework aimed at protecting monetary stability and strengthening confidence in the dinar. The result, reported in the Fraser Institute’s 2026 report based on 2024 data, highlights the importance of the institutional approach adopted by the Central Bank in managing the exchange rate, interest rates, liquidity and reserves. These tools are particularly important in a small, open economy affected by regional and international developments.
اضافة اعلان
The strength of Jordan’s experience lies in the continuity of its monetary policy and the clarity of its objectives, foremost among them maintaining the dinar’s peg to the US dollar, in place since 1995, at approximately JD 0.709 per dollar. This peg does more than stabilize the currency. It provides companies and investors with a clear benchmark for calculating external obligations, pricing payments and managing cash flows. It also limits exchange-rate fluctuation risks, helping improve planning and investment decisions. However, exchange-rate stability does not insulate the economy from increases in global prices or shipping and energy costs; rather, it reduces one significant source of economic risk.
This stability is underpinned by strong foreign reserves, which reached $28.47 billion at the end of September 2026, an increase of 11.7% compared with the end of 2025. The reserves are sufficient to cover approximately 9.2 months of imports of goods and services. They represent the primary line of defense for the dinar’s stability, strengthening the Central Bank’s ability to meet demand for foreign currencies, support the fulfillment of external obligations and give the economy greater room to withstand shocks. Their importance lies not only in their size but also in their role in reinforcing market confidence in the Kingdom’s ability to manage its external payments.
At the same time, interest rates play a central role in maintaining the dinar’s attractiveness. The Central Bank raised interest rates by 25 basis points effective September 21, 2026, bringing the main interest rate to 6%. This policy aims to maintain the attractiveness of dinar-denominated assets and limit potential pressure on the exchange rate, while taking global monetary developments into account. However, successful interest-rate management is not measured by the level of rates alone. It depends on the Central Bank’s ability to balance monetary stability with financing costs for businesses and individuals, particularly given the need to stimulate investment and production.
The importance of this balance is evident in the inflation trend. Inflation stood at 1.56% in 2024, 1.77% in 2025 and 2.26% during the first nine months of 2026 compared with the same period a year earlier. Relative price stability preserves purchasing power, gives households and businesses a better basis for financial planning, and reduces uncertainty when preparing budgets and determining project costs. Nevertheless, sustainably controlling inflation also requires economic policies that strengthen competition, productivity and supply-chain efficiency, because monetary policy alone cannot address every source of rising prices.
These tools are complemented by foreign-currency inflows from tourism and remittances from Jordanians working abroad. Tourism revenue reached $5.56 billion during the first eight months of 2026, while incoming workers’ remittances totaled $2.97 billion during the first seven months, marking growth of 14.1%. These inflows support the economy’s ability to finance imports and meet external obligations, ease pressure on reserves, and underscore the importance of productive and service sectors, as well as expatriates, in supporting monetary stability.
The real challenge, however, is not simply maintaining third place globally but translating this stability into broader economic growth. Sound money provides an essential foundation for investment, but it does not by itself guarantee higher growth rates, job creation or increased exports. These outcomes require a more competitive business environment, financing directed toward productive sectors, disciplined fiscal policies and reforms that raise productivity and the economy’s capacity to absorb investment.
Jordan’s achievement demonstrates the importance of coordination among monetary policy instruments and consistency in their management. Reserves support exchange-rate stability, interest rates enhance the dinar’s attractiveness, and liquidity management helps contain inflationary pressures. The economic value of this approach lies in providing a framework of confidence and stability that should be built upon to strengthen investment, production and employment. This would ensure that the country’s monetary performance remains more than a high ranking in an international index and translates into tangible improvements in economic performance and citizens’ living standards.
