Raad Mahmoud Al-Tal

Jordan’s monetary indicators in 2025 present a clear picture of stability and confidence. This is anchored by strong foreign reserve levels that exceed international adequacy benchmarks. The foreign reserve adequacy ratio reached 115 per cent, above the International Monetary Fund’s projected 111 per cent. This gap reflects not only solid economic fundamentals, but also the Central Bank of Jordan’s effectiveness in managing external risks. More importantly, it signals the credibility of the monetary policy framework and the stability of market expectations.

Foreign reserves amounting to $24.5 billion, covering 8.8 months of imports, place Jordan comfortably within the safe zone for oil-importing economies. This buffer strengthens the economy’s ability to absorb shocks arising from energy price volatility and tighter global financial conditions. Maintaining this level over the medium term suggests that foreign currency inflows are structurally supported, driven by remittances, improved foreign investment dynamics, and sustained access to external financing, rather than being temporary or cyclical.

This monetary stability has translated into greater confidence in the national currency. Dollarization declined to 17.8 per cent in 2025, underscoring the renewed attractiveness of the Jordanian dinar as a store of value. In a relatively open economy, declining dollarization is a sensitive and meaningful indicator of trust. It reflects reduced concerns over exchange rate risk and purchasing power erosion, while enhancing the Central Bank’s ability to guide credit conditions and manage liquidity effectively.

Confidence has also extended beyond domestic markets to Jordan’s sovereign debt performance internationally. Falling yields on Jordanian Eurobonds and narrowing spreads relative to peer emerging markets indicate an improvement in the country’s sovereign risk profile. Notably, the spread between Jordanian Eurobonds and US Treasury securities is among the lowest in the region. This reflects a favorable assessment of Jordan’s fiscal discipline, debt sustainability, and overall creditworthiness.

The marked decline in current Eurobond yields compared with the original issuance yield of 7.75 per cent for bonds maturing in 2029 signals a shift in investor sentiment from caution toward measured confidence. While global yield trends have played a role, this improvement also reflects growing recognition of Jordan’s capacity to meet its financial obligations within a credible and sustainable fiscal framework.

At the domestic level, the banking sector has been a key pillar supporting economic activity. Credit facilities extended to micro, small, and medium-sized enterprises reached JD3.4 billion by mid-2025, highlighting an expansion in productive financing that is essential for growth and job creation. Total credit facilities rose to JD36.1 billion by October 2025, confirming the banking system’s strength and its ability to meet the economy’s financing needs without liquidity stress.

Another positive signal lies in the growth of bank deposits alongside a narrowing interest rate spread between lending and deposit rates to 2.64. This points to improved efficiency in financial intermediation and rising confidence in the banking sector. A smaller spread also indicates better risk management and lower borrowing costs, which support private investment and enhance competitiveness.

These monetary indicators portray a resilient economy characterised by monetary stability, strong domestic and external confidence, and a banking sector capable of sustaining economic momentum. The challenge ahead is not merely to preserve these achievements, skillfully managed by the Central Bank, but to translate them into higher and more inclusive growth through effective government policy. Only then can financial strength be transformed into tangible gains in production, employment, and household incomes.