Central Bank of Jordan Raises Rate 25bps to 4.50%

The Central Bank of Jordan raised its key monetary policy interest rates by 25 basis points.  The following rates were affected:  the overnight deposit window rate will go up to 2.25% from 2.00%, the repurchase agreement rate will increase to 4.25% from 4.00%, and the rediscount rate will go up to 4.5% from 4.25%.  The Governor of the Central Bank of Jordan, Sharif Faris Abdul Hamid Sharaf, said the purpose of the increase in interest rates is to maintain fiscal stability and contain inflation.

In February 2010, the Bank lowered monetary policy interest rates by 50 basis points.  Jordan is expected to see inflation of 6.1% this year according to a report for the Gulf Cooperation Council by Banque Saudi Fransi.  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.

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