- Decision
- Lower
- Rate change
- 25 bps
- interest rate
- 5.75%
The Central Bank of Jordan’s Open Market Operations Committee lowered the key interest rate and all other monetary policy instrument rates by 25 bp, effective 14 December 2025, pointing to subdued inflation, solid foreign-reserve buffers and continued economic expansion as justification. After holding steady through mid-2025, the authority has now delivered three consecutive 25 bp cuts since September. The decision comes amid ample banking‐system liquidity, with deposits up 7.3 % y/y to JOD 49.3 bn and credit facilities 3.9 % higher at JOD 36.1 bn by end-October. Inflation averaged a contained 1.8 % in the first 11 months, while foreign reserves rose to USD 24.6 bn at end-November, covering 8.8 months of imports. Output growth reached 2.8 % in Q2 after 2.7 % in Q1, underpinned by gains in tourism revenue (+6.5 %), remittances (+4.1 %) and exports (+8.8 %) in the year to date, alongside a 36.4 % jump in H1 FDI inflows to USD 1.0 bn. The central bank reiterated its commitment to closely monitor domestic, regional and global conditions and to take further measures as needed to safeguard monetary stability and support sustainable growth.
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.