Ammon News - Ahmad alhyari-The interest rate curve in Jordan moved towards a clear turning point during the year 2032, after the policy of the Central Bank of Jordan (CBJ) began to take less stringent decisions, including maintaining interest rates after a series of rapid increases in 2022, similar to the major central banks, led by the US Federal Reserve System, which recently released signals in its last December meeting to reduce interest rates at the beginning of 2024.

The monetary policy of the CBJ, driven by global economic developments and the trends of central banks globally and regionally in their monetary policies to contain inflationary pressures, took into account the US Federal Reserve’s shift towards a policy of Quantitative Easing (QE).

The US Federal Reserve since the beginning of the monetary tightening cycle in March 2022, has raised the interest rates 11 times including 7 times in 2022 and 4 times in 2023, while fixing it 4 times, including 3 times in a row, most recently in last December, to remain at a level between 5.25% and 5.5%, which is the highest in 22 years.

The CBJ's monetary policy responded to these developments during 2022, so it raised interest rates on its monetary policy tools 7 times by 400 basis points, and 425 basis points on the overnight deposit window.

The Central Bank of Jordan also took last year 8 decisions related to interest rates, including 4 decisions to raise interest rates and 4 to stabilize them, ending the year 2023 at the bank’s main interest rate of 7.25%.

In this context, central banks, including the Central Bank of Jordan, are awaiting the US Federal Reserve’s decisions regarding interest rates for the year 2024, as expectations, the most important of which are Goldman Sachs’ expectations, indicate 5 upcoming interest rate cuts by the US Federal Reserve during 2024, as it said that "It is possible that the US Federal Reserve will reduce interest rates three times in the first half, by 25 basis points."

Analysts also suggested that the US Federal Reserve would make two more cuts during the second half of 2024. However, economists said that there may be earlier and more aggressive cuts in interest rates at the US Federal Reserve compared to many major central banks in developed countries, indicating lower inflation around the world.

According to these data, expert analyzes and in light of the Central Bank of Jordan’s approach indicate that Jordan is awaiting 5 upcoming interest rate cuts, as part of its continuous monitoring of the US Federal Reserve, which may reduce interest rates three times in the first half of 2024 by 25 basis points.

Finally, it is noteworthy that the banking sector listed on the Amman Stock Exchange (ASE) achieved a growth in its profits in 9 months of 2023, by 29%, on an annual basis.