CBJ Cuts Interest Rates on Monetary Policy Instruments by 25 Basis Points.

Amman: The Central Bank of Jordan (CBJ) has announced a reduction in interest rates on all its monetary policy instruments by 25 basis points, effective from next Sunday. This decision follows a comprehensive review of both local economic indicators and the global interest rate environment, which continue to support the CBJ's accommodative monetary policy introduced last September. According to Jordan News Agency, the CBJ emphasized the robustness of Jordan's monetary indicators and the stability of the Jordanian dinar, which is underpinned by significant foreign reserves totaling $20.4 billion at the end of last October. These reserves are deemed adequate to cover the Kingdom's import needs for over eight months. The bank also noted that this move comes amid a decline and stabilization of the inflation rate, which was recorded at 1.6% for the first three quarters of 2024. The CBJ reported a notable increase in bank deposits, which rose by approximately JD3.1 billion, reflecting a 7.1% annual growth rate, b ringing the total to JD46.3 billion by the end of September 2024. Additionally, credit facilities extended by banks increased by JD1.4 billion, representing a 4.3% annual growth rate, amounting to JD34.7 billion. Financial safety indicators reveal the resilience of the Jordanian banking sector, highlighted by a high capital adequacy ratio of 17.6%, one of the highest in the region, and a legal liquidity level of 138.8%, surpassing the CBJ's required rate of 100%. Despite regional uncertainties, recent economic data indicates a 3.5% increase in Jordanian expatriate remittances during the first eight months of 2024, totaling $2.3 billion. Tourism revenue reached approximately $5.6 billion during the first three quarters of 2024, although this marked a 4.3% decline compared to the same period last year. The CBJ estimates that the trade deficit decreased by about 5% during the first ten months of the year, attributed to better-than-expected export performance from January to October. For 2024, the national eco nomy is projected to grow by 2.4%, with a 2.2% growth rate recorded in the first half of the year. The CBJ will continue to monitor economic, financial, and monetary developments at local, regional, and global levels, taking measures to maintain monetary and financial stability in the Kingdom and foster an environment conducive to economic growth.