CBJ raises monetary policy rates by 75 basis points

The Central Bank of Jordan (CBJ) on Thursday raised all its benchmark monetary policy rates by 75 basis points, effective September 25, 2022, citing inflationary pressures and global geopolitical uncertainty.

In a statement, the bank’s Open Operations Market Committee said that the decision is in line with the bank’s mission to preserve the Kingdom’s monetary stability and the Jordanian dinar’s appeal as a savings instrument in the face of fluctuating interest rates and other international financial developments. Additionally, it aims to restrain any inflationary pressures brought on by the Russo-Ukrainian War and geopolitical risks, which are driving up global inflation rates, the committee further explained.

The committee said it kept interest rates on a JD1.3 billion CBJ-sponsored refinancing program unchanged in order to strike a balance between the goals of safeguarding monetary stability and spurring economic growth and mitigating the impact of higher interest rates, it added.

The tranche, launched in the aftermath of the Covid-19 pandemic, targets ten critical sectors of the economy, providing a lending window at 1-percent interest rate for Amman-based businesses and 0.5 percent for non-Amman-based enterprises.

The committee also decided to extend the CBJ’s JD700 million program to help small and medium enterprises, professionals, craftspeople, and importers in the wholesale sector of basic commodities until the end of the current fiscal year, while keeping the interest rate at 2 percent for 54 months, including a 12-month grace period from the date of approval.

Source: Jordan News Agency

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