AMMAN: The Central Bank of Jordan (CBJ) announced Wednesday it is cutting its benchmark lending rates by 25 percent basic points, setting the key monetary policy instruments rates at 2.5 percent, down from 2.75 percent.
The bank also said it will trim its discount rate to 3.75 percent, instead of 4 per cent, and overnight repo rate to 3.5 per cent, down from 3.75 per cent, as of Thursday. In a statement, the CBJ cited positive indicators for the move, foremost of which is falling inflation, which had dropped to minus 0.8 per cent over the first five months of the year due to plummeting oil prices in the global market.
Other indicators, it said, pointed to growth in expatriate remittances as well as record build-up in foreign currency reserves, which stood at over $15 billion, enough to cover the Kingdom’s commodity and service imports for eight months. This trend, it pointed out, partially reflects the dinar’s attractiveness as a saving pot and Jordan’s ability to attract more Arab and foreign capital in addition to a steep fall in the budget deficit as well as the operational losses of the national electricity company.
The CBJ, said Jordan, like the rest of the regional countries, had been stricken by the instability affecting global and regional economies, which prompted drawbacks in domestic economic indicators, notably national exports and tourism revenues, which led to a slowdown in growth rates that were cut to two percent of GDP during the first quarter of the year, compared with 3.2 percent in the same period the previous year.
