Amman, Jan. 29 (Petra) – The Open Market Operations Committee at the Central Bank of Jordan (CBJ) commenced its 2026 policy calendar by holding the benchmark policy rate and its associated interest rate corridor steady. This strategic pause reflects a commitment to monetary tightening cycles that have successfully anchored the Kingdom’s financial stability, ensuring that the domestic yield curve remains synchronized with regional and international benchmarks to preserve the Dinar’s carry-trade appeal.

The CBJ’s balance sheet continues to show exceptional strength, with gross foreign currency reserves surging past the $26 billion mark as of January 2026. This liquidity buffer provides a formidable 9.0-month import cover, vastly outperforming international safety thresholds. Furthermore, the systematic deleveraging of dollar-denominated holdings – evidenced by the deposit dollarization rate retreating to 18% – signals deep-seated market confidence in the national currency’s terminal value. With the 2025 headline inflation print moderated to a disciplined 1.77%, the Central Bank has successfully navigated price stability without compromising the economy’s underlying competitiveness.

The banking sector’s fundamentals remain robust, characterized by high capital adequacy and prudent risk management. Total deposit growth accelerated 7.2% year-on-year to JD 49.8 billion, while the credit facility stock expanded by 3.3% to JD 36.2 billion. This expansion occurs against a backdrop of high liquidity and healthy Return on Equity (ROE), underscoring the sector's resilience and its capacity to act as a primary transmission mechanism for economic funding at sustainable cost-of-capital levels.

Jordan’s external account performance has likewise exceeded baseline expectations. Tourism receipts – a critical driver of the services balance – ascended 7.6% to reach $7.8 billion in 2025. This was bolstered by a 4.6% uptick in worker remittances and a dynamic 7.7% growth in total exports, which reached $12.1 billion. Notably, the Kingdom’s capital account saw a significant boost as net Foreign Direct Investment (FDI) inflows spiked by 27.7%, totaling $1.5 billion through the third quarter of 2025. These collective tailwinds pushed real GDP growth to 2.75% during the same period, suggesting a strong secular recovery. Moving forward, the CBJ remains data-dependent, pledged to calibrate its monetary stance in response to global interest rate trajectories to ensure enduring financial equilibrium.

//Petra// AA