The Governor of the Central Bank, Dr. Ziyad Fariz, said during a press briefing today Sunday that the Central decided, in light of the rapid global developments resulting from the emerging Corona virus and the challenges it poses to the national economy, to pump additional liquidity to the national economy of 550 million dinars by reducing the mandatory cash reserve, Reducing financing costs and increasing the deadlines for existing and future facilities for economic sectors, including medium and small projects through the bank’s program to finance and support economic sectors, in addition to supporting the procedures of the Jordanian loan guarantee company by reducing the company’s program commissions And raising the insurance coverage percentage for the local sales guarantee program.
He indicated that the banks were allowed to postpone the installments due on the affected companies, provided that this is not considered a structuring of the facilities, and that it also does not affect the credit rating of the companies at Crave Company, and that the banks do not charge commission or delay interest on these companies due to this, in addition to allowing the banks to make Scheduling the debts of clients who meet the concept of scheduling without cash payment and without delay interest, and postponing retail customer installments including credit card payments, housing loans and personal loans without any commission or delay benefits, indicating that all these procedures continue until the end of the year To.
Fariz stressed that the Central decided to reduce the compulsory reserve ratio on deposits with banks from 7 percent to 5 percent, which would provide additional liquidity to banks in the amount of 550 million dinars, enabling banks to reverse this measure by reducing the interest rates they charge on the facilities granted by them to all economic sectors. Including individuals and companies, noting that this is the first time that the central bank has reduced mandatory cash reserves since 2009.
He added that the cost of financing the Central Bank’s program to finance and support the economic development sectors has been reduced to existing and future facilities, so that the program’s interest rates are reduced to 1 percent instead of 1.75 percent for projects inside the capital’s governorate of 0.5 percent instead of 1 percent for projects in the rest of the provinces.
He stressed that banks should reduce interest at the same rate on existing loans from its date, increase the deadlines available for advances for all sectors targeted in the program within the capital and unify them with the rest of the provinces to become 10 years, including a two-year grace period for those who wish, and raise the ceiling of advances to all sectors to 3 Millions of dinars while maintaining the ceiling for the renewable energy and transportation sectors at 4 million dinars, and the inclusion of the export sector within the program.
He pointed out that the sectors currently covered are industry, tourism, agriculture, renewable energy, information technology, transportation, health, technical, technical and vocational education and engineering consulting.
Fariz pointed to the reduction in the commission for guaranteeing the industrial finance and services program from 1.5 to 0.75 for all loans that will be granted from its date until the end of the current year 2020, in addition to reducing the commission for guaranteeing emerging projects loans from 1 percent to 0.75 percent for loans that will be granted from its date until the end of the year Currently, the insurance coverage for the domestic sales guarantee program has been increased from 80 percent to 90 percent.
He pointed out that instructions have been issued to citizens and guests of Jordan who are on the territory of the Kingdom to maintain their safety when dealing with cash, and instructions have been issued to licensed banks and exchange companies that are obligated to apply, by maintaining the cleanliness of cash, sterilizing containers, bags, counting and sorting machines, and places of its preservation, and providing the necessary protection for employees dealing with cash and citizens.
In a response to Petra’s questions in this regard, Freez said that quarantine operations for the currency will be conducted for a period of two weeks, indicating that this measure will not affect the money supply in the market, as banks operating in Jordan were addressed by exchanging cash, calling on citizens to use payment methods Mail available.
And that the Central issued a circular, in which he called on banks and payment services companies and electronic transfer of funds to continue providing basic financial services to customers without interruption, by ensuring the readiness of the information technology infrastructure and the readiness of business continuity sites, and ensuring the continuity of the provision of payment services, especially ATMs And points of sale (POS) at merchants and the ongoing maintenance of these devices and feeding them with sufficient banknotes after they were duly processed to meet the needs of the public without any interruption.
Freez stressed the continuation of the Central Bank of Jordan to provide any additional liquidity to banks through monetary policy tools, including repurchase agreements (REPO), and interest rate changes will be reflected on these agreements.
In his response to a question to the Jordanian News Agency “Petra” about the foreign reserves and the extent of their coverage of the Kingdom’s imports, Freez said that the volume of the reserve has reached 14 billion dinars, and it is sufficient to cover imports more than 7 months, and that the situation is very reassuring in this regard.
He added that the decrease in oil prices will positively affect the value of the Kingdom’s imports, and increase the opportunity for export of the local product, noting that the current account deficit is 3 percent of the gross domestic product, expected to reach between 4 to 5 percent of the gross domestic product in light of the spread of the virus and the decline Global economies.
He indicated that the sensitivity of the negative change in the volume of workers remittances abroad is still simple, and will not affect the short term on the foreign reserve.
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