Introduction

According to Dr. Adel Sharkas, the Governor of the Central Bank of Jordan, the Kingdom’s foreign exchange reserves currently stand at $17.5 billion. These reserves are sufficient to cover the country’s imports for more than 7 months.

Stable Inflation Rate

Dr. Sharkas predicts that the inflation rate in Jordan will remain at 2.7 percent by the end of this year, which aligns with the levels observed over the past seven months. This stability in inflation is a positive indicator for the country’s economic health.

Interest Rates and Monetary Policy

To ensure monetary stability and maintain a favorable exchange rate for the Jordanian dinar against foreign currencies, the Central Bank has increased interest rates. This move also aims to keep inflation at an acceptable level.

Main Goals of the Central Bank

The primary objectives of the Central Bank of Jordan are to maintain monetary stability, which is crucial for overall investment, and to preserve the stability of the Jordanian dinar exchange rate. Dr. Sharkas anticipates a global decrease in interest rates in the second quarter of 2024, provided that economic data in the United States of America continues to improve.

Inflation Rate and Jordan’s Success

In 2020, Jordan recorded an inflation rate of 4.2 percent, which is the lowest in the region. Despite global wheat prices reaching $650 per ton, the country has successfully maintained the stability of the Jordanian dinar exchange rate against foreign currencies and has effectively fought against inflation.

Monetary System Strength and Stability

Dr. Sharkas emphasizes that Jordan has a strong and stable monetary system. There are no restrictions on the movement of funds, as confirmed by recent instructions issued by the World Bank and the International Monetary Fund. These instructions highlight the resilience of the Jordanian banking system and its ability to withstand economic shocks.

Source: Petra