CBJ maintains interest rates unchanged

AMMAN — The Open Market Operations Committee of the Central Bank of Jordan (CBJ) on Thursday decided to maintain interest rates on monetary policy instruments unchanged.

The committee discussed economic and monetary developments in the Kingdom which demonstrated the resilience of the national economy and its sustained positive performance, the Jordan News Agency, Petra, reported.

The CBJ foreign reserves maintained their high rates, reaching $18.8 billion, sufficient to cover the Kingdom’s imports of goods and services for 8.2 months.

Bank deposits also saw an increase of approximately JD1.9 billion by the end of April 2024, marking a 4.5 per cent annual growth rate and bringing the total to JD44.3 billion.

Credit facilities granted in dinars by banks rose by around JD755 million, with a 2.7 per cent annual growth rate, reaching a total balance of JD34.1 billion.

The interest rate margin continued to decline, reaching 2.41 per cent at the end of April, marking its lowest level in over a quarter of a century.

Indicators of financial robustness, as of the end of 2023, confirm the Jordanian banking system's strength and resilience.

The latest available data indicates that the Kingdom successfully contained inflationary pressures, maintaining it at levels conducive to economic activity. The inflation rate stood at 1.7 per cent during the first five months of 2024, down from 4.2 per cent in 2022.

The national economy achieved a real economic growth rate of 2.6 per cent in 2023, an increase of 0.2 percentage points from the previous year's level, Petra reported.

Preliminary data suggests a significant reduction in the current account deficit, which fell to 3.7 per cent of GDP in 2023, compared to 7.8 per cent in 2022. This improvement reflects an 11 per cent reduction in the trade balance deficit and a 62.8 per cent increase in the services account surplus, driven by a 27.4 per cent rise in tourism income in 2023.

During the available period of 2024, data showed a 4 per cent increase in expatriate workers' remittances during the first third of this year, reaching JD1.1 billion, while tourism income amounted to $2.6 billion in the January-May period of 2024.

The CBJ affirmed its keen monitoring of regional and global economic developments and the trends of central banks regionally and internationally regarding interest rates and will continue to study their impacts on the national economy.