Jordan reduces its interest rates to invigorate economy

The Jordanian Central Bank (JCB) declared that it will reduce the interest rate from 8 5% to 7.75% in continuation of a decline in interest rates since last June, brought about by a number of positive economic factors.

An official in the JCB said that this step is a strong signal for the banks to apply another reduction to interest rates on loans and savings which the banks had not been reduced in a sufficiently.

The interest rate on deposit papers was reduced from 9.5% to 9%, which is the third reduction since June when it was 10%. Jordanian monetary authorities expect that private banks will reduce interest rates on the savings and loans soon, but some bankers said that the reduction of the JCB's interest rates will take 6 months for the banks to put into effect which is expected to invigorate the Jordanian economy.