- Decision
- Maintain
- Rate change
- 0 bps
- interest rate
- 6.5%
The Central Bank of Jordan’s Open Market Operations Committee left the main policy rate and all other monetary policy instrument rates unchanged at its fifth 2025 meeting, judging existing settings appropriate amid 2.7 % year-on-year GDP growth in Q1 and subdued inflation averaging 2 % in H1, with price rises expected to edge to 2.2 % for 2025. Rates have been held steady at every meeting since January 2025. The decision comes as foreign reserves exceed USD 22 bn, covering 8.4 months of imports, while bank deposits grew 7.1 % and credit expanded 3.9 % year on year to JOD 48.2 bn and JOD 35.5 bn, respectively, underpinning a sector whose capital adequacy ratio stands at 18 % and liquidity at 144.7 %. Tourism receipts rose 11.9 % to USD 3.7 bn in the first half and exports increased 8.6 % to USD 5.6 bn, further supporting external balances despite ongoing regional geopolitical tensions. The central bank reiterated that it will keep monitoring domestic and international developments and stands ready to act to safeguard monetary and financial stability.
Rate evolution
The Central Bank of Jordan held its policy rate steady through mid-2025, then cut it by a cumulative 75 basis points between September and December before pausing at 5.75% in January and March 2026. The early holds were framed around inflation near 2%, high foreign reserves, strong banking-sector liquidity and capital, and resilient growth, exports, tourism and remittances despite regional geopolitical tensions, while the December cut was presented as consistent with monetary stability, firmer reserves, low inflation at 1.8%, and solid banking and external-sector conditions.
In subsequent meetings, the Central Bank of Jordan kept the policy rate unchanged, citing stronger reserves, lower dollarization, moderate inflation and gradual growth improvement, while placing more emphasis on preserving the attractiveness of JOD-denominated assets and alignment with regional and global markets. By March it said uncertainty had intensified, though ample reserves and low inflation offered a buffer against external shocks and possible global price increases, and it signalled readiness to act promptly as data and international rates evolve. At its fourth and fifth meetings of 2026, it maintained the policy rate at 5.75% and other monetary policy instrument rates unchanged, citing monetary stability, the attractiveness of JOD-denominated assets and alignment with regional and international markets, alongside ample reserves, moderate inflation, comfortable banking-sector liquidity and capital adequacy, and gains in remittances and exports. At its sixth meeting, it raised rates on all monetary policy instruments by 25 basis points effective 21 September 2026 to preserve monetary stability, strengthen the attractiveness and competitiveness of JOD-denominated assets and align local rates with regional and international market trends, after reviewing monetary policy stances at central banks and measures addressing rising inflationary pressures, while noting inflation of 2.20% in the first eight months, tourism income growth of 2.9% to about USD 5.6 billion over the same period, and increases of 14.1% in remittances to about USD 3.0 billion and 7.2% in national exports to USD 6.6 billion in the first seven months.