AMMAN - (Xinhua) - The Central Bank of Jordan decided to raise interest rates on all monetary policy instruments of the bank by 75 basis points (0.75 percent), starting next Sunday.

The bank said in a statement today (Thursday) that this decision "aims primarily to maintain monetary stability in the Kingdom and to maintain the attractiveness of assets denominated in Jordanian dinars."

He explained that the decision "comes in line with the continuation of upward trends in interest rates in international and regional financial markets, in light of global inflation rates remaining at high levels compared to the rates targeted by central banks."

The bank stated that the annual inflation rate in the Kingdom increased from 2.5 percent in January 2022 to 5.4 percent in September, bringing the average inflation rate to 4.0 percent during the first three quarters of this year.

The statement said that it was decided to fix the preferential interest rates for the Central Bank’s program to refinance vital economic sectors, amounting to 1.3 billion dinars (the dinar is equivalent to 1.41 US dollars), at 1.0 percent for beneficiary projects within the Capital Governorate, and 0.5 percent for projects in the rest of the governorates, with a guarantee. The interest rate remains constant throughout the ten-year loan term.

The bank stated that this step comes "in view of the importance that the central bank attaches to achieving a balance between its goal of maintaining monetary stability and continuing to stimulate and support sustainable economic growth."

The bank also decided to fix interest rates within its program to support small and medium-sized companies, professionals, craftsmen, and importers of the wholesale sector of basic commodities, amounting to 700 million dinars, at its current level, which does not exceed 2 percent for borrowers, until the end of the program.

According to the reports submitted to the bank, monetary, banking and economic indicators showed an improvement in their performance, as deposits increased by 2.3 billion dinars compared to the end of 2021, bringing their balance to 41.8 billion dinars at the end of September 2022, according to the statement.

Credit facilities granted by banks increased by 2.3 billion dinars during the same period, bringing their balance to 32.3 billion dinars.

The central bank's foreign reserves also recorded a "comfortable level", which currently stands at about $16 billion. This level is sufficient to cover more than 8 months of the Kingdom's imports of goods and services.

The economic growth rate also rose to 2.9 percent during the second quarter of this year, after recording a growth of 2.5 percent during the first quarter of 2022, bringing the average growth rate to 2.7 percent during the first half of 2022, compared to a growth of 1.8 percent during the same period. From 2021, this is the highest semi-annual rate recorded since 2017.

Tourism income also rose during the first three quarters of this year to 3 billion dinars, compared to 1.2 billion dinars during the same period last year, with a growth rate of nearly 140.8 percent.

Jordanian exports increased by 45.6 percent during the first eight months of this year, as well as remittances from Jordanians working abroad by 0.6 percent during the same period. In addition, foreign investment increased by 96.9 percent during the first half of the year.

The bank raised interest rates on all monetary policy tools of the bank by 75 basis points on September 22, after raising them by the same rate in late July.

The bank previously raised the interest rate by 50 basis points on all monetary policy tools on the eighth of last May, before raising it again by the same value on the 16th of last June.