Jordanian Banks Reduce Interest to Support the Affected Economic Sectors

  • Amman, Hashemite Kingdom of Jordan
  • 14 April 2020

The Jordanian authorities continued to implement their pledges to mitigate the effects of Corona on the affected sectors in an attempt to circumvent the burdens on companies and individuals through incentives and financial facilities.

Commercial banks have responded to calls by the Central Bank of Jordan to reduce the interest rate paid by individuals and small and medium-sized companies affected by the crisis by a reduction of 1.5 percent as of the end of April.

The decision was issued by the Association of Banks in Jordan, which represents commercial banks, after the central bank lowered the base interest rate in mid-March to 2.50 percent from 3.50 percent.

Small companies are the hardest hit, as most of their revenues have stopped after applying strict isolation measures a month ago that led to the suspension of many economic sectors altogether.

These companies have not received sufficient government support and are concerned about their ability to continue to pay workers’ wages.

The central bank announced a package of measures to help affected companies and individuals by issuing instructions to commercial banks to postpone loan payments to companies and individuals.

The Jordanian Central Bank decided to pump additional liquidity to the economy at a value of 550 million dinars ($775.5 million), by reducing the mandatory cash reserve on deposits with banks from 7 percent to 5 percent.

Source (Arab Newspaper-London, Edited)