Jordan- Central bank cuts interest rate on loans to industry
(MENAFN- Jordan Times) The Central Bank of Jordan (CBJ) on Monday reduced its interest rate on loans extended to banks under its medium-term loan programme for the industrial sector and prolonged the period by an additional term of one year, to end by March 31, 2013.
As such, the interest rate will become the rediscount rate on the day a loan is extended minus a 2 per cent margin.
In a statement issued yesterday, the CBJ said the decision reflects its commitment to provide medium-term financing for the industrial sector through licenced banks in the Kingdom. The decision is also in pursuance of the measures that the CBJ has taken to support the industrial sector.
The step also seeks to boost the competitiveness of the industrial sector and to increase its contribution to economic development especially that the sector is one of the major contributors to gross domestic product (GDP).
In 2011, its contribution to the GDP was 22.4 per cent.
CBJ Governor Ziad Fariz said the step is part of a set of measures the CBJ is taking to boost the performance of key economic sectors and to empower the Jordanian economy to face exceptional economic difficulties.
In a circular sent to banks, the CBJ urged them to reduce their interest rate on credit facilities extended to the sector by the same amount.
Regulations issued by the CBJ last year stipulated that the bank could grant licenced banks loans for nine months at window rediscount rate, on condition that a loan would not exceed JD5 million.
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