Governor of the Central Bank of Jordan: Advanced Monetary Strategies Strengthen the Dinar and Shape a Monetary Scene that Supports Economic Growth

SadaNews Economy - In light of global economic fluctuations and increasing regional and international financial pressures, the Jordanian dinar continues to maintain its stability, supported by prudent monetary policies and independent institutional management that have enabled the national economy to overcome unprecedented challenges in recent years.

In this context, the Governor of the Central Bank of Jordan, Dr. Adel Sharkas, provided an in-depth analysis of the monetary stability in the Kingdom in an interview with the Jordan News Agency (Petra), affirming that the increase in foreign reserves to a level exceeding $24.6 billion was not the result of an exceptional circumstance or temporary inflows, but rather the fruit of a comprehensive approach to monetary policy management, based on proactivity, flexibility, and the effective use of the bank's tools, which anticipates global changes instead of merely reacting to them.

Sharkas explained that the monetary stability system in Jordan has proven its ability to withstand unprecedented financial and regional pressures, beginning with the turmoil that has shaken global markets over the past three years, through fluctuations in global interest rates, to the geopolitical tensions affecting the region.

He noted that the bank's ability to boost its reserves from approximately $18 billion to over $24.6 billion in a short period reflects the robustness of the Jordanian economic base and the success of the financial system in generating sustainable surpluses of foreign currencies through multiple channels, including national exports, remittances from workers abroad, tourism sector revenues, and foreign direct investment, in addition to the natural flows in the banking market.

He emphasized that Jordan's success in protecting its monetary stability was not an outcome imposed by reality but resulted from prudent management based on a solid institutional independence that has enabled the bank to make its decisions free from immediate pressures or short-term considerations, clarifying that monetary policy in Jordan is managed according to a precise scientific approach that monitors global developments minute by minute, tracking the movements of major central banks, fluctuations in international markets, and future trends in interest rates, inflation, and liquidity, ensuring that incremental and balanced decisions are made to maintain exchange rate stability and funding costs without exposing the economy to any imbalances.

He affirmed that the bank's independence is not just a legal text but a daily practice that enhances the bank's ability to protect the dinar and maintain a competitive level of reserves and credit, pointing out that this independence has been and continues to be one of the most important sources of economic strength and a key element in enhancing the confidence of local and foreign investors, as it establishes a stable financial environment that does not change its course with the shifts in political mood or immediate preferences but remains committed solely to its primary goal of protecting the value of the dinar and ensuring the stability of the financial system.

He indicated that the Jordanian monetary policy has long relied on the principle of proactivity and fortifying the local market against external shocks, which has enhanced investor confidence in the soundness of the monetary approach and the stability of the financial framework, noting that the dinar has maintained its stability since 1995, and this stability was not merely a slogan but a strategic commitment that constituted the foundation upon which the bank's policies were built, whether in managing interest rates, reserves, or regulating banking activity.

He pointed out that the strength of the dinar represents the cornerstone of the Jordanian business environment, as it grants investors the ability to plan long-term without exposure to exchange rate fluctuations, and it enhances the kingdom's competitiveness in attracting capital seeking stable markets protected from monetary risks, adding that Jordan's positive credit rating, the high solvency of the banking sector, and the tight regulatory frameworks collectively form supportive elements for this financial stability.

He explained that the Jordanian financial sector is witnessing a qualitative transformation supported by an advanced technological infrastructure developed by the bank in recent years, asserting that the digital payment system has become a crucial part of the economic cycle, with the "eFawateercom" system managing annual transactions exceeding $21 billion, while transactions through "Click" surpassed $17 billion, along with the increasing expansion in the use of bank cards and e-wallets, which has contributed to broadening financial inclusion, raising transparency levels, and reducing transaction costs.

He noted that these digital transformations were not merely technical updates but a large-scale economic project contributing to accelerating financial movements, revitalizing productive sectors, and facilitating commercial and service operations, which in turn has enhanced institutions' and investors' trust in the efficiency of the Jordanian financial infrastructure and its ability to absorb the increasing growth in electronic services.

He confirmed that the bank has given utmost importance to cybersecurity by establishing a strict regulatory system to protect the financial infrastructure from any threats, indicating that Jordan is one of the first countries in the region to successfully build a comprehensive framework for banking cybersecurity by employing advanced technologies, training personnel, and subjecting the sector to periodic testing to enhance readiness and prevention.

Sharkas discussed developments in interest rates, clarifying that the Jordanian monetary policy considers the historical relationship between the dinar and the dollar, while also relying on continuous assessment of local economic conditions regarding levels of economic activity, liquidity, and credit trends.

He affirmed that any decision made in this area aims primarily at protecting monetary stability, and the central bank has succeeded in achieving a delicate balance between the needs of the real economy and the requirements of maintaining the exchange rate.

He indicated that the Jordanian economy is undergoing a gradual transition from the recovery phase to real growth, with expectations for growth to reach around 3 percent in 2026 and exceed 4 percent by 2028, pointing out that foreign reserves at the bank have exceeded $24.6 billion, a historic level covering about 110 percent of the Kingdom's obligations according to the adequacy standard adopted by the International Monetary Fund, which supports exchange rate stability and enhances confidence in the economy.

Sharkas revealed a 36 percent increase in foreign direct investment inflows during the first half of the year, expecting this momentum to continue given the improvement in regional conditions and ongoing monetary and financial stability, noting that the decline in the dollarization rate to 17.9 percent from 24 percent reflects growing confidence in the dinar and the adopted monetary policy.

He affirmed that Jordan stands on a more solid monetary and financial foundation and that the strength of the economy is no longer measured solely by growth rates but by its ability to manage risks, absorb shocks, and provide a safe and stimulating environment for investment and economic activity.