jordan pulse -
Today, Tuesday, the Financial and Economic Committee of the Senate, headed by Dr. Rajai Muasher, discussed monetary policy with the Governor of the Central Bank, Dr. Adel Al-Sharkas.
Al-Ain Al-Muasher said that the meeting comes as a continuation of previous meetings, to learn about the monetary policies and the efforts of the Central Bank in monetary stability, and to know the effects of the war on Gaza on the economic sectors and the bank’s reserves and the impact of the continuation of the war on the banking and monetary situation.
In turn, the Circassians stated that maintaining monetary stability represents the main goal and first priority of the Central Bank, indicating that the bank’s decisions to raise interest rates on monetary policy tools during the last period came to maintain this goal and to contain inflationary pressures.
He explained that the indicators prove the effectiveness of the Central Bank’s measures, despite the unfavorable global environment and the prevailing challenges in the region, as demand for the dinar increased, which is reflected by the continued decline in the “dollarization” rate, reaching 18.0 percent at the end of last November, compared to levels exceeding 20 percent. Before the repercussions of the Corona pandemic.
The Circassians confirmed that foreign reserves are at comfortable and reassuring levels and currently amount to $18 billion, sufficient to finance 7.8 months of the Kingdom’s imports of goods and services, pointing out that the inflation rate reached 2.1 percent during the past year compared to inflation exceeding 4 percent in 2022, which is among the lowest. Inflation rates recorded in the region and the world.
He added, “Although the Central Bank raised interest rates by 5.25 basis points since the end of March 2022, the weighted average interest rates on loans and advances rose by 216 basis points, which constitutes only 41.1 percent of the total raising operations carried out by the bank.” “This indicates that the banks did not raise interest rates on loans by the amount that the Central Bank did.”
He pointed out that the weighted average interest rates on “time deposits” increased by 248 basis points, constituting 47.2 percent of the total raising operations, indicating that the interest rate margin between loans and “time deposits,” amounting to 3.06 percent until the end of last November, is the lowest since 26 years old.
The Circassians appreciated the vital role of the banking sector in the national economy, as the facilities granted by banks increased on an annual basis by about 997 million dinars to reach 33.4 billion dinars at the end of last November. Deposits in banks also increased by 1.2 billion dinars to reach 43.3 billion dinars, which is This reflects confidence in the banking sector.
He stressed that the banking sector in the Kingdom is sound, solid, and highly stable, and is able to withstand shocks due to its solidity and high levels of capital and liquidity.
He pointed out that the local economic scene was marked by many achievements and gains achieved on the ground during the year 2023, the most prominent of which is moving forward with the financial and structural reform approach by successfully completing the sixth and seventh reviews of the economic reform program with the International Monetary Fund.
The Circassians considered this a recorded achievement for the government, and it confirms the commitment and seriousness in implementing economic reforms that paved the way towards crossing into a new economic program with the Fund to continue the economic reform agenda without interruption.
He said that Jordan's stable credit outlook was the main headline agreed upon by credit rating institutions during the year 2023, and that removing Jordan's name from the list of countries under monitoring in the field of combating money laundering and terrorist financing in 2023 will increase the confidence of the international community and investors in the Jordanian economy and Jordan's commitment to legislation and agreements. International.
He stressed that many indicators witnessed positive performance during the year 2023, most notably tourism income, as the economy recorded a growth of 2.7 percent during the first three quarters of 2023, expecting the economy to record growth close to this percentage for the entire year 2023.
The Circassians pointed out that the impact of the repercussions of the war in Gaza was limited on the performance of economic activity in 2023, and that its repercussions in 2024 depend on the length of the crisis and the extent of its expansion, stressing that the national economy possesses the experience and tools in confronting shocks that enable it to overcome this crisis. And get out of it at the lowest cost.
Petra