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CBJ Raises Interest to Protect National Economy

CBJ Raises Interest to Protect National Economy

Tuesday, 23 April, 2019 - 14:30
Governor of the Central Bank of Jordan Ziad Fariz during a seminar on Monday, April 22, 2019. (Petra)
Amman- Asharq Al-Awsat
The Central Bank of Jordan (CBJ) adjusted the interest rate as needed to protect the national economy from the challenges resulting from unstable regional conditions, CBJ Governor Ziad Fariz said on Monday.

The CBJ is considering establishing other means to lower costs and maintain monetary and financial stability, Jordan News Agency, Petra, quoted him as saying.

Fariz pointed out that the CBJ takes into consideration accurate and independent scientific data, facts and analysis while adjusting the interest rate.

He added that national economic indicators are also factored into the CBJ’s decisions along with regional and international economic indicators.

“The CBJ currently enjoys a high level of foreign reserves that exceeds $13 billion, which is enough to cover the Kingdom’s imports of goods and services for 7.2 months and is double the internationally accredited requirement of three months,” Fariz explained.

CBJ studies indicate that in the last eight years, Jordan has lost Jordan an equivalent of some 20 percent of its GDP in export opportunities, he added, noting that the contribution of national exports to the GDP dropped from 25 percent to 19.4 percent in the past years due to the border closures.

According to Fariz, the local private sector needs to adapt permanently to these shifts in the economic environment “requiring adaptive support services and the development of the infrastructure’s physical and financial services.”

“Since 2012, the CBJ has been going forward with the refinance program, aimed at facilitating soft loans to banks at low and fixed interest rates.”

These loans focus on lowering the costs of facilitating credit in the governorates and areas outside Amman, with a repayment period that can reach 15 years, he explained.

Fariz said that the finance volume available under this program stands at some JD1.2 billion, adding that more than JD600 million of which have been granted the industry, tourism, renewable energy, agriculture, ICT, engineering consultation, health, transport, and education sectors.

The CBJ also provided licensed banks operating in Jordan with a $440 million credit line to reissue in loans for SMEs, in cooperation with regional and international institutions, he stressed.

Since then, $252 million have been provided to these banks and financial institutions, the Governor reaffirmed.

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