Direction to stabilize debt burden without affecting premiums by raising interest rates | Money and business | zad jordan news

zad jordan news –

On Sunday, the Executive Director of the Research Division at the Central Bank of Jordan, Nidal Al-Azzam, indicated that there was a “tendency to stabilize debt service burden without reversing the increase in interest rates on loan installments,” after interest rates were raised. on all monetary policy instruments.

He added during his speech to the Al-Mamlaka channel that “the stabilization of debt service burdens is a steady trend for any future increase in interest rates,” noting that “Jordanian banks have a partnership with the Central Bank , which has a stable relationship and has played a very important role in translating many of the Central Bank’s directions.During the Corona pandemic, Jordanian banks implemented the procedures with great efficiency and responsibility.

Al-Azzam pointed out that “the Central Bank has seen the need to take a decision to change the interest rate and that what applies to the rate hike with the current experience will be completely reversed on future rate hikes, while the banks are released to choose the method of implementation. “

The central bank’s action in determining individual loan installments aims to reduce the burdens on individual lenders, retail customers, or the so-called individual lenders, and to reduce the burdens on them, as the central bank has asked banks for individual loan installments determine, and the choice was left to individual lenders if the lender did not want to install. If the installment is paid, he can inform the bank that he does not want the installation.

– Healthy inflation levels between 1-4% –

In the episode of the “Economic Sunday” program, entitled “What is inflation and how does it affect us?” Al-Azzam said the general consumer price index “inflation” is one of the most important variables monitored by central banks in the world, explaining that “inflation measures change in the level of the consumer price index.

He added that “inflation is that” the consumer price index is published by the Department of Statistics according to scientific methodologies that measure a basket of currencies and commodities consisting of about 893 commodities.

“The prices of commodities are therefore monitored by the department and by repeated visits, and the monitoring of commodities that are subject to continuous changes in prices is visited more than once and monthly, as the number is produced and issued by the Department of Statistics. . “according to Al-Azzam, noting that” when we talk about inflation, or a rise in prices, we are talking about the general level of prices, a weighted medium for individual prices. “

He stressed, “the importance of inflation for any central bank in the world, as there is no bank except and its aim is to maintain price stability, so there are healthy levels of inflation ranging from 1-3-4% “depending on the structure of each economy.”

He continued, “Our goal in the Central Bank is monetary stability, and inflation is one of the elements of this stability, in addition to the stability of the dinar exchange rate, which represents both the purchasing power of the local currency, and the stability of the “Purchasing power of the local currency is a very important factor, and the stability of inflation has many repercussions on the economy, and it is an important factor.” To encourage long-term loans and loans.

– Inflation rate around 3.8% for the end of the year –

The director general of the Association of Jordanian Banks, Maher Al-Mahrouq, said that “inflation is a central bank’s focus, and the banking system is usually the main channel through which the central bank implements its instructions and policies.”

He continued to “The Kingdom”, that “any reaction of the central bank to inflation in which a monetary policy is adopted by raising or lowering interest rates directly, the party involved in its implementation is the banking sector, and therefore the “Immediately reflect on the methods and implementation of banks’ procedures, whether by raising or lowering interest rates. And the implementation of monetary policy and its frameworks are within the instructions available by the Central Bank.”

He pointed out that “the responsibility of the Central Bank is to maintain monetary stability, which is growth, exchange rate and inflation, and these three procedures represent the focus of banking operations that take place in the banking system, and all banking sector operations are based on monetary policies adopted by the Central Bank. “

Al-Azzam said that “when Jordan is compared to the countries of the region, it is one of the lowest countries in the region in terms of inflation rates,” adding that “today, in 2022, the inflation rate is much lower than what is found. us in the outside world. ”

He added, “We are talking today about the issuance of a new figure by the Department of Statistics on inflation, which speaks of 3% on average for the first 5 months, and 4.6% from last May, and it was expected, and we expect the inflation rate to fluctuate on average this year. ” “About 3.8%, and it’s a moderate rate and has an advantage, and it’s part of the competitiveness of the national economy.”

According to the Department of Statistics, “inflation” rose by 2.62% in the first third of this year; To reach 104.58 compared to 101.91 for the same period last year.

The department indicated in its latest monthly report that the general consumer price index for the month of April this year rose by 3.59%, to 105.99, compared to 102.31 for the same month last year.

At the monthly level, the general consumer price index for the month of April this year reached 105.99 compared to 104.73 for the month of March of the same year, which recorded an increase of 1.20%.

Governor of the Central Bank, Adel Sharkas, during a symposium organized by Al-Zaytoonah University, indicated that the inflation rate in the Kingdom is still within reasonable limits despite the global inflationary wave, as it is not 2.6 % during the first four months of 2022. , with the expectation that the inflation rate will reach a level ranging from About 3.8% by the end of this year.

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