The central bank of Jordan (CBJ) slashed as of January 20 its key interest rates by 25bps to further boost economic growth and stimulate private sector credit expansion, the bank said in a statement. This is the second straight monetary easing in recent months following a similar rate cut in October 2013. The rate cut comes amid positive economic developments, including slowing CPI inflation, rising JOD-denominated assets, increased investment inflows and rising FX reserves, the central bank noted.
The bank also said it remains ready to act proactively to sustain monetary stability and to promote an attractive investment environment.
The CBJ’s deposit window interest rate now stands at 3.25% (down from the previous 3.50%) and the repo rate was cut to 4.00%. The rediscount rate was reduced to 4.25%.
Jordan’s CPI inflation eased to 3.3% y/y in December 2013 from 3.4% the month before on falling utilities and tobacco prices, which offset higher rents, clothing and fresh produce charges. In 2013, Jordan’s CPI inflation averaged 5.6% undershooting the IMF’s initial forecast of 5.9% full-year price growth.
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