jordan pulse -

The Open Market Operations Committee of the Central Bank of Jordan (CBJ) has decided in its seventh meeting of the year to reduce interest rates on all monetary policy instruments by 25 basis points, effective Sunday, 10 November 2024.

The committee stated that the decision followed a thorough review of local economic indicators and global interest rate trends, supporting the CBJ's ongoing accommodative monetary policy, initiated in September.

The committee highlighted the strength of Jordan's monetary indicators and the resilience of the Jordanian dinar, backed by high foreign reserves reaching $20.4 billion by the end of October 2024—enough to cover over eight months of the Kingdom's imports. Additionally, inflation has remained stable, averaging 1.6% over the first three quarters of 2024.

Bank deposits rose by JOD 3.1 billion by the end of September 2024, a 7.1% annual increase, totalling JOD 46.3 billion. Meanwhile, credit facilities provided by banks increased by JOD 1.4 billion, a 4.3% rise year-on-year, reaching JOD 34.7 billion.

Financial soundness indicators reflect the stability of Jordan's banking sector, with a capital adequacy ratio of 17.6%, among the highest in the region, and a legal liquidity level of 138.8%, exceeding the CBJ’s required minimum of 100%.

Despite regional uncertainties, the latest economic indicators resilience in Jordan’s external sector. Worker remittances rose by 3.5% to $2.3 billion in the first eight months of 2024, while tourism income reached $5.6 billion in the first three quarters, a 4.3% decline year-on-year. CBJ estimates also point to a 5% reduction in the trade deficit during the first ten months of this year, attributed to stronger-than-expected export performance. Furthermore, the national economy is expected to grow by 2.4% in 2024, with growth recorded at 2.2% for the first half of the year.

The CBJ will continue to closely monitor economic, financial, and monetary developments domestically, regionally, and globally, taking appropriate actions to ensure monetary and financial stability in the Kingdom and foster an economic environment conducive to growth.