CBJ raises monetary policy rates by 25 basis points

23-03-2023 03:56 PM

Ammon News - The Central Bank of Jordan (CBJ) on Thursday raised all its benchmark monetary policy rates by 25 basis points, effective March 26, 2023.

The bank's Open Operations Market Committee held a meeting to discuss the performance of the national economy, the latest monetary and banking developments in the Kingdom, and their repercussions on the expected performance for the current year, in addition to global economic developments, the performance of financial markets, and interest rate trends.

To preserve the Kingdom's monetary stability and the Jordanian dinar's appeal as a savings instrument, the committee decided to keep interest rates on a JD1.4 billion CBJ-sponsored refinancing program, which targets 10 sectors, unchanged at 1.0 percent for Amman-based businesses and 0.5 percent for borrowers in the rest of the Kingdom, extending the program until the end of March 2024 due to its importance in supporting the gradual recovery of the Jordanian economy, creating more job opportunities and ensuring funding for the targeted economic sectors on soft lending terms.

The committee also decided to keep interest rates for another JD700 million credit line targeting small and medium companies, professionals and craftsmen at less than 2 percent, and for a period of 54 months, including a grace period of up to 12 months.

The committee's decisions also come to restrain inflationary pressures in light of the increase in the inflation rate in the Kingdom in 2022 to reach 4.2 percent, which dropped to 4 percent in January and February 2023 driven by an increase in the core inflation rate, which stood at 4.3 percent during the same period.

The committee stressed the solid performance of all monetary, banking and economic indicators in the Kingdom, according to the latest available data, foremost of which are the foreign reserves of the Central Bank of Jordan, which have maintained their high level of $16.7 billion and are sufficient to cover the Kingdom's imports of goods and services for a period of 7.3 months.

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