Amman, Dec 13 (Petra) -- Amid global economic fluctuations and growing regional and international financial pressures, the Jordanian dinar continues to maintain stability, buttressed by a prudent monetary policy and independent institutional management that enabled the national economy to overcome unprecedented challenges in recent years.

Central Bank of Jordan (CBJ) Governor Adel Al Sharkas, in an interview with Petra, gave an in-depth analysis of the monetary stability landscape in the Kingdom.

He said a rise in foreign reserves to over $24.6 billion was not the outcome of exceptional circumstances or temporary inflows, but the fruit of an integrated approach to managing monetary policy based on proactivity, flexibility, and an effective utilization of bank tools, anticipating global changes rather than just reacting to them.

Al Sharkas pointed out that Jordan's monetary stability system has proven resilience in the face of unprecedented financial and regional pressures, from the turmoil that swept global markets in the last three years, through fluctuations in global interest rates, to the geopolitical tensions affecting the region.

The bank's ability to boost reserves from approximately $18 billion to over $24.6 billion in a short period underlines the strength of Jordan's economic base and a successful financial system in generating sustainable foreign currency surpluses through multiple channels, including national exports, remittances from expatriate workers, tourism revenues, foreign direct investment, and the natural flows within the banking sector, he said.

He said Jordan's success in protecting monetary stability was not a given, but the result of prudent management based on well-established institutional independence that enabled the bank to make decisions free from immediate pressures or short-term considerations.

Monetary policy in Jordan is managed according to a precise scientific approach that monitors global developments in real time, tracks the actions of major central banks, and observes fluctuations in international markets and future trends in interest rates, inflation, and liquidity, he pointed out.

"This ensures that gradual and balanced decisions are made to maintain exchange rate stability and the cost of financing without exposing the economy to any imbalances," he added.

Al Sharkas explained that the CBJ's independence is not merely a legal provision, but a daily practice that enhances the bank's ability to protect the dinar and maintain a competitive level of reserves and credit. This independence, he added, has been and remains one of the most important sources of the economy's strength and a pivotal element in bolstering the confidence of local and foreign investors.

It is because it establishes a stable financial environment whose direction is not altered by political shifts or short-term considerations, but remains exclusively committed to its fundamental objective of protecting the value of the dinar and ensuring the stability of the financial system, he said.

The CBJ head said Jordanian monetary policy has long been based on the principle of proactivity and protecting the local market from external shocks., which strengthened investor confidence in the soundness of the monetary approach and the stability of the financial framework.

He noted that the dinar has maintained its stability since 1995, adding that stability is not merely a slogan but a strategic commitment that forms the foundation upon which the bank's policies are built, whether in managing interest rates, reserves, or regulating banking activity.

The Central Bank Chief said a strong dinar is a cornerstone of the Jordanian business environment, as it allows investors to plan for the long term without being exposed to the risks of exchange rate fluctuations.

It also enhances the Kingdom's competitiveness in attracting capital seeking stable markets protected from monetary risks, he said, adding that Jordan's positive credit rating, the high solvency of the banking sector, and robust regulatory frameworks collectively constitute elements supporting financial stability.

Al Sharkas said the Jordanian financial sector is undergoing a qualitative transformation, backed by an advanced technological infrastructure developed by the bank over the past years. He emphasized that the digital payments system has become a pivotal part of the economic cycle, with the "eFawateercom" system handling annual transactions exceeding $21 billion, while "Click" transactions have surpassed $17 billion. This is in addition to the increasing use of bank cards and electronic wallets, which contributed to expanding financial inclusion, increasing transparency, and reducing transaction costs, he said.

These digital transformations are not merely technological updates, but a large-scale economic project that contributes to accelerating the flow of funds, stimulating productive sectors, and facilitating commercial and service operations, which strengthened the confidence of institutions and investors in the efficiency of the Jordanian financial infrastructure and its ability to accommodate the increasing growth in electronic services.

He said the bank has given cybersecurity utmost importance through establishing a rigorous monitoring system to protect the financial infrastructure from any threats. He noted that Jordan is among the first countries in the region to successfully build a comprehensive framework for banking cybersecurity through the use of advanced technologies, training of staff, and subjecting the sector to periodic testing to enhance preparedness and prevention.

Al Sharkas addressed interest rates, saying that Jordanian monetary policy takes into account the historical relationship between the dinar and the dollar, but is also based on a continuous assessment of local economic conditions in terms of economic activity levels, liquidity, and credit trends.

Any decision taken in this area aims primarily to protect monetary stability, he said, adding that the Central Bank has succeeded in recent years in achieving a delicate balance between the needs of the real economy and the requirements of maintaining the exchange rate.

He said the Jordanian economy is witnessing a gradual transition from a recovery phase to a phase of real growth that is expected to reach approximately 3 percent in 2026 and exceed 4 percent by 2028.

Al Sharkas said foreign direct investment (FDI) inflows grew by 36 percent in the first half of the year, anticipating continued growth given the improved regional situation and ongoing monetary and financial stability. He also mentioned a decline in the dollarization rate to 17.9 percent, down from 24 percent, which reflects increasing confidence in the Jordanian dinar and current monetary policy.

He concluded that Jordan stands on a more solid monetary and financial foundation, and that the strength of the economy is no longer measured solely by growth rates, but also by the ability to manage risks, absorb shocks, and provide a safe and stimulating environment for investment and economic activity.

//Petra//SS