Tuesday, February 7, 2012

Central Bank of Jordan Raises Rate 50bps to 5.00%

The Central Bank of Jordan raised its key monetary policy interest rates by 50 basis points.  The following rates were affected:  the overnight deposit window rate will go up to 2.75% from 2.25%, the overnight repurchase agreement rate will increase to 4.75% from 4.25%, and the rediscount rate will go up to 5.00% from 4.50%.  The Bank said: "This action aims at supporting monetary stability by curbing expected inflationary pressures and ensuring a competitive return on the JD's denominated assets; which would promote both domestic and foreign investment environment and support sustainable economic growth rates."

The Bank last raised rates 25 basis points in June last year, while it last lowered monetary policy interest rates by 50 basis points in February 2010.  According to the IMF the Jordanian economy grew by 4.1% in 2010, while inflation average inflation and annual inflation was 5.28% and 5.33% respectively, compared to 4.4% in 2011.  Jordan's currency, the Jordan Dinar (JOD), has traded close to the US dollar over the past year, with the USDJOD exchange rate last trading at 0.71


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