Ammon News - The Open Market Operations Committee at the Central Bank of Jordan (CBJ) held its first meeting in 2023, and discussed the economic, monetary and banking developments in the Kingdom.

The committee also discussed the measures of the central banks to confront inflationary pressures, ant the end of the meeting, the committee decided to rise the interest rates on all monetary policy instruments by 25 bps, effective Sunday, February 5, 2023.

The committee also decided to continue fixing subsidizes interest rates on loans granted by banks within the “CBJ Program for Refinancing Vital Economic Sectors”, which are 10 sectors, amounting to JD1.4 billion, at 1.0% for beneficiary projects within Amman, and 0.5% in the rest of Kingdom's provinces.

The Committee considers with importance the contribution of this program, at the present time, in supporting economic recovery, creating job opportunities, and providing sufficient financing for the targeted economic sectors on concessional terms.

In light of the end of the “CBJ Program to Support Small and Medium Enterprises, Professionals, Craftsmen, and Importers of the Wholesale Trade Sector of Basic Commodities” at the end of February 2023, the committee decided to extend the work of this program for an additional two months, ending at the end of April 2023.

It also decided to keep the interest rate on loans granted by banks through this program as its current level, which reaches a maximum of 2% for borrowers, without change, as financing is granted according to the fixed interest rate for 54 months, including a grace period of up to 12 months.

Noting that most of the funding provided by the CBJ for this program has been utilized, since its launch at the beginning of the pandemic until now, at a volume of JD700 million.

The committee's decisions also come in response to the continued inflationary pressures in the environment of regional and international economies, which in turn contributed to the rise in the inflation rate in the Kingdom to 4.2% in 2022.

The latest data discussed by the committee confirmed the solid performance of the monetary and banking sector indicators, foremost of which are the foreign reserves of the bank, which have maintained their high level, currently amounting to $17.2 billion, and sufficient to cover the Kingdom's imports of goods and services for a period of 7.5 months.

Likewise, deposits with banks increased during the year 2022 by JD2.6 billion, with a growth of 6.5% compared to 2021, to reach JD42.1 billion.

In addition to the increase in credit facilities granted by banks by JD2.6 billion, with a growth that exceeded the expected rate of 8.5%, bringing its balance to JD32.6 billion at the end of 2022.

The indicators of the external sector witnessed a tangible improvement in their performance, as tourism income exceeded the level achieved before the pandemic, exceeding the barrier of JD4.1 billion in 2022, which is more than double what was achieved during 2021.

National merchandise exports increased by a significant rate of 37.0% during the first 11 months of 2022.

At the same time, the volume of foreign direct investment entering the Kingdom increased by 93.6% during the first 3 qtrs of 2022, to reach JD629.3 million, which is more than what was expected for the full year 2022.

This is in addition to the increase in remittances from Jordanians working abroad by 1.5% in 2022.

All of this contributed to an increase in the real growth rate in the gross domestic product to 2.7% during the first 3 qtr of 2022, compared to a growth of 2.2% for the same period of 2021.

The CBJ will continue to closely monitor monetary, banking and economic developments, locally, regionally and internationally, and take the necessary measures to maintain monetary and banking stability in the Kingdom.