Jordan Financial Market Update
Jordan extends deposit guarantees
Jordanian Prime Minister Nader Dahabi has announced the extension of last years' guarantee of private commercial deposits in the kingdom's banks until end of 2010, to shore up confidence in the banking system, Reuters has reported. The move aims to mitigate the global downturn's impact on the aid-dependent economy. The country's 23 commercial banks have had minimal exposure to Western markets, and a strong supervisory system run by an independent central bank has limited their currency, property and stock market exposure.
Jordan may issue sukuk to tackle deficit
Jordan is considering issuing sukuk by end of the year to help it cover part of its spiralling budget deficit, Reuters has reported. A committee has been set up to study how to introduce the Islamic bonds for the first time in the kingdom which traditionally relies on conventional six month, one-year and three-year maturity T-bills and bonds, sources at the Jordanian ministry of finance told the news service.
Jordan M2 supply slows
According to data by Central Bank of Jordan, the kingdom's money supply growth had slowed to 6.3% in the year to August from growth of 14.6% during the same period in 2008, Reuters has reported. Money supply, measured as M2, rose to JD19.463bn at end-August 2009, from JD18.304bn at the start of the year, the data showed. M2, the broadest measure of money supply in Jordan's economy, rose 14.6% in the first eight months of last year when it stood at JD17.879bn at end-August, 2008 against JD15.606bn at the start of 2008.
Jordan scales down 2010 budget
Jordan's budget for next year will be scaled down by around JD590m, compared to the current year's budget, the Jordan Times has reported. The envisaged budget for 2010 will stand at JD5.6bn compared with JD6.2bn for 2009, a decrease of 9.6%. The estimated budget deficit for the next year, taking into account foreign grants, is forecast to stand at around JD685m, or 3.9% of the gross domestic product (GDP), compared with JD1,178m or 7.3% of GDP this year.
Jordan trade deficit falls
Jordan's trade deficit between January and July narrowed by 27.4% to about JD3bn from JD4.1bn during the same period last year, the Jordan Times has reported. According to Jordan's Department of Statistics, total exports and re-exports had dropped by 15.6% during the first seven months of this year to JD2.6bn compared to JD3.1bn.
Jordan remittances drop
According to the Central Bank of Jordan (CBJ), remittances from Jordanians working abroad had dropped 3.7% in the first seven months of 2009 compared with the same period of 2008, Bloomberg has reported. Remittances from some 700,000 Jordanians fell to JD1.48bn ($2.1bn) in the period, CBJ has said.
Jordan to get $300m loan from World Bank
The World Bank plans to give Jordan a $300m loan by the end of the year to help offset the country's budget deficit, the Jordan Times has reported. The kingdom 'will have a long grace period as well as low interest rates associated with the long-term loan', the kingdom's minister of finance has said. Jordan's budget deficit for the first seven months of 2009 had reached JD640m ($902m) compared with JD90m during the same period last year.
Jordan project investments on the rise
The Central Bank of Jordan believes that favourable investment laws in the country have helped push up project investment by 9% in the first six months of this year. The total value of projects that benefited from the Investment Promotion Law reached JD924m, compared with JD841m during the same period last year. Around JD500m of that figure - and 54% of the 281 total ventures which had applied to receive incentives - came from foreign investors, CBJ said.
Jordan Central Bank auctions three-year bonds
The Central Bank of Jordan (CBJ), acting on behalf of the government, auctioned three-year treasury bonds in an offering worth JD100m ($141m) yesterday. Made available to local and foreign banks, investment funds and pension funds, the bonds mature on August 24 2012. Used by the government to finance growing public debt in Jordan, the previous three-year treasury bonds, issued earlier this month, had an average yield of around 5.2%, maturing on August 13 2012.
Jordan Central Bank not worried about inflation
Umayya Toukan, governor of the Central Bank of Jordan, has said he is not worried about inflation risks in the country, even with oil's recent climb above $70 a barrel, Reuters has reported. "Clearly compared to $140 last year, the $70 plus it is not really a big concern at the moment," he said. The Jordanian economy is expected to grow 3% - 4% this year, roughly half of last year's rate.
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