AMMAN – On Tuesday, the
Financial and Economic Committee at the Jordanian Senate, chaired by Dr.
Rajai Muasher, met with the Governor of the
Central Bank of Jordan (CBJ), Dr. Adel
Al-Sharkas, to discuss the Kingdom’s monetary policy, Al-Ghad reported.
اضافة اعلان
Dr. Muasher stated that this meeting builds upon previous
discussions, aiming to
review monetary policies, the CBJ’s efforts in
maintaining monetary stability, and understanding the impact of the
Gaza war on
economic sectors and bank reserves.
In response, Sharkas emphasized that preserving monetary
stability is the primary goal and top priority for the CBJ. He highlighted that
recent decisions to raise interest rates on monetary policy instruments were
made to uphold this objective and mitigate inflationary pressures.
Despite global economic challenges and regional
uncertainties, the Central Bank’s measures have proven effective. The continued
decline in the dollarization rate, which reached 18.0 percent at the end of
November last year after previously exceeding 20 percent before the
COVID-19 pandemic, indicates that demand for the Jordanian dinar has increased.
Sharkas confirmed that foreign reserves are currently at
comfortable and reassuring levels, amounting to $18 billion, sufficient to
cover 7.8 months of the kingdom’s imports of goods and services. He also noted
that the inflation rate was 2.1 percent during the past year, compared to
inflation exceeding 4 percent in 2022, making it one of the lowest inflation
rates in the region and the world.
Despite the CBJ raising interest rates by 5.25 basis points
since the end of March 2022, the average lending and borrowing rates increased
by only 216 basis points, representing just 41.1 percent of the total rate
hikes implemented by the bank. This indicates that
commercial banks did not
fully pass on the rate increases set by the CBJ.
The average expected increase in interest rates on term
deposits was 248 basis points, constituting 47.2 percent of the total rate
hikes. Notably, the interest rate spread between loans and term deposits stood
at 3.06 percent until the end of November, the lowest level in 26 years.
Sharkas commended the vital role of the banking sector in
the national economy. Annual bank facilities increased by approximately JD997
million, reaching JD33.4 billion by the end of November. Additionally, bank
deposits rose by JD1.2 billion, reaching JD43.3 billion, reflecting confidence
in the banking sector.
He affirmed that the banking sector in the Kingdom is sound
and stable, with substantial capital and
liquidity buffers to withstand shocks.
The local economic landscape witnessed several achievements
and gains in 2023, notably advancing the financial and structural reform agenda
through the successful completion of the sixth and seventh reviews of the
economic reform program with the
International Monetary Fund (IMF).
Sharkas considered this an accomplishment for the
government, emphasizing commitment and seriousness in implementing economic
reforms that paved the way for a new economic program with the IMF, ensuring
continuity in the economic reform agenda without interruption.
He stated that the stable credit outlook for Jordan was a
key highlight agreed upon by credit rating institutions during 2023.
Furthermore, removing Jordan from the list of countries under surveillance in
the field of
anti-money laundering and terrorism financing in 2023 will enhance
international confidence in the Jordanian economy and its commitment to
legislative and international agreements.
Several indicators demonstrated positive performance during
2023, with tourism income leading the way. The economy recorded a growth rate
of 2.7 percent during the first three quarters of 2023, and it is expected to
achieve similar growth for the entire year.
Sharkas emphasized that the impact of the
Gaza war had
limited effects on economic activity in 2023. The repercussions in 2024 will
depend on the duration and extent of the crisis. He affirmed that the national
economy possesses the experience and tools to navigate this crisis and emerge
with minimal costs.
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