Jordanian Central Bank Cuts Interest Rate by 25 Basis Points to Support Monetary Stability

SadaNews Economy - The Open Market Operations Committee at the Central Bank of Jordan decided, in its seventh meeting of this year, to lower the "key interest rate" of the Central Bank and the interest rates on other monetary policy tools by 25 basis points, effective Sunday, November 2, 2025.

This reduction came in light of the Committee's assessment of economic, monetary, and financial developments, including the trends in interest rates locally, regionally, and globally. Monetary and banking indicators have shown a continued positive performance momentum during the past period of the year. The foreign reserves of the Central Bank reached an unprecedented level of 23.9 billion dollars by the end of September 2025, which covers the Kingdom's imports of goods and services for 9.1 months, equivalent to three times the internationally recognized standard, reflecting the robustness of monetary and banking stability in the Kingdom. The dollarization rate also fell to 17.9% at the end of August 2025, while the inflation rate stabilized around approximately 2% during the first three quarters of this year, a level consistent with the Central Bank's expectations, which is likely to maintain purchasing power and enhance the competitiveness of the national economy.

Additionally, total customer deposits in banks increased by 5.5% year-on-year, reaching 48.8 billion dinars by the end of August 2025, while the outstanding balance of credit facilities granted by banks rose by 3.3%, reaching 35.7 billion dinars. Financial safety indicators for banks at the end of the first half of the year confirmed the strength of the Jordanian banking sector and its solid performance, as the capital adequacy ratio reached 18%, one of the highest in the region, along with comfortable legal liquidity levels at 142.4%, exceeding the ratio imposed by the Central Bank of 100%.

In terms of balance of payments indicators, the Kingdom's tourism income increased by 6.8% during the first three quarters of this year to reach 6.0 billion dollars, while remittances from workers abroad grew by 3.1% during the first eight months of the year, reaching 3.0 billion dollars. Similarly, total exports from the Kingdom achieved a growth of 7.7% during the first eight months of the year, reaching 9.5 billion dollars. Net inflows of foreign direct investment into the Kingdom increased during the first half of 2025 to 1.0 billion dollars, a growth of 36.4% compared to the same period in 2024. Consequently, the current account deficit in the first half of the year declined to 7.4% of GDP, compared to 8.3% during the same period in 2024, supported by an 18.7% increase in the services account surplus and a 42.1% reduction in the investment income deficit. In terms of economic growth, the national economy recorded a growth rate of 2.8% during the second quarter, after achieving a growth of 2.7% in the first quarter of the year.

The Central Bank of Jordan reaffirms its steadfast commitment to maintaining monetary and financial stability, serving the goals of sustainable economic growth and overall economic stability in the Kingdom.