- Decision
- Raise
- Rate change
- 25 bps
- interest rate
- 6%
The Central Bank of Jordan’s Open Market Operations Committee raised interest rates on all monetary policy instruments by 25 basis points effective September 21, 2026, citing rising inflationary pressures and the need to preserve monetary stability, support the Jordanian dinar’s attractiveness and align domestic rates with regional and international markets. The move followed 25-basis-point cuts in September, October and December 2025 and a key rate of 5.75% through July 2026. Inflation rose to 2.20% in the first eight months of 2026 from 1.86% a year earlier, while prior data showed first-quarter growth of 2.9% and projected full-year growth of 2.7%; monetary and banking conditions remained sound. Remittances increased 14.1% in the first seven months, while tourism income continued recovering. The committee also considered global and regional financial-market trends and other central banks’ policy responses to inflation, and said it would continue monitoring developments and take measures needed to maintain 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.