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- The CBJ cut its main policy rates 25 basis points across the board.
- The CBJ changed main interest rates as of July 9th as follows:
|
Instrument |
Old Rate |
New Rate |
|
Rediscount Rate |
4.00% |
3.75% |
|
O/N Repo |
3.75% |
3.50% |
|
Weekly Repo (“CBJ Main Rate”) |
2.75% |
2.50% |
|
CD’s |
2.50% - 2.75% |
2.25% - 2.50% |
|
Window Rate |
1.75% |
1.50% |
- Based on the changes made by the CBJ to the interest rates structure, it seems that the CBJ is comfortable with the economic and political outlook of Jordan.
- Moreover, it seems that the CBJ is indicating that banks should become more active in lending to the private sector and allocate liquidity more efficiently.
- However, since the new monetary policy framework was announced in February of this year, credit growth has been minimal. Credit facilities have grown by 622 million JD in the first 4 months of the year, up by 3.2%.
- It is important to note that excess liquidity levels are currently around 4 billion JD (including weekly CDs).
- Meanwhile, latest government bond yields are as follows:
- Interest rates are expected to drop in the coming months due to higher excess liquidity in the market and the new rate cut.
