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CBJ cuts interest rates by 25 basis points to support economic stability

By JT - Nov 09,2024 - Last updated at Nov 09,2024

The Central Bank of Jordan (CBJ) announces on Saturday a 25-basis-point reduction in interest rates across all monetary policy instruments, effective November 10, 2024 JT file photo

AMMAN — The Central Bank of Jordan (CBJ) announced on Saturday a 25-basis-point reduction in interest rates across all monetary policy instruments, effective November 10, 2024.

The decision aimed to maintain an accommodative monetary policy in light of a comprehensive review of local economic indicators and international interest rate trends, according to the CBJ.

The CBJ stressed that this move extends the approach first implemented in September, aimed to support economic stability.

The bank pointed to several positive signs, including strong monetary indicators and the resilience of the Jordanian dinar, which has been bolstered by high foreign exchange reserves reaching $20.4 billion in October, sufficient to cover 8 months of Jordan's imports of goods and services.

Inflation also showed signs of stability, declining to 1.6 per cent in the first three quarters of 2024, the CBJ said, adding that other positive economic indicators include a 7.1 per cent year-on-year growth in bank deposits, which totalled JD3.1 billion at the end of September 2024. 

The bank said that the credit facilities increased by JD1.4 billion, reflecting a 4.3 per cent year-on-year rise, bringing the total to JD34.7 billion.

The banking sector's capital adequacy ratio stood at a strong 17.6 per cent, one of the highest in the region, and its liquidity ratio remained robust at 138.8 per cent, above the regulatory requirement of 100 per cent.

Workers’ remittances grew by 3.5 per cent to reach $2.3 billion in the first eight months of 2024, while tourism income reached $5.6 billion, despite a slight decline of 4.3 per cent from the same period last year due to regional instability.

The trade deficit narrowed by 5 per cent in the first ten months of 2024, largely due to a rise in Jordan's exports, the bank said adding that the economy grew by 2.2 per cent in the first half of the year, with an annual growth forecast of around 2.4 per cent.

The CBJ reiterated its commitment to monitoring both domestic and international economic developments to ensure monetary and financial stability in the Kingdom while promoting an environment conducive to sustainable economic growth.

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