AMMAN: The Central Bank of Jordan (CBJ) said Saturday it intended to continue to link the national currency, the dinar, with the US dollar despite fears emanating from the downgrading of the US sovereign debt by Standard and Poor's (S&P) rating agency.
"From a practical viewpoint, the dinar-dollar peg, in force since 1995, has effectively served the Jordanian economy," CBJ Gov. Sharif Fares Sharaf said in an interview with the official Petra news agency.
"This policy has helped the CBJ to ensure monetary stability, a low inflation rate and competitiveness of the Jordanian exports in foreign markets," Sharaf said.
The dinar-dollar linkage also enabled the country to build up foreign currency reserves which now stand at a "comfortable level" of $11.9 billion, sufficient enough to cover Jordan's imports for seven months, he added.
Sharaf said that the CBJ shared the world bodies, including the International Monetary Fund (IMF), their opinion that "the effective and real exchange rate of the dollar will not deviate from its average rate".
The CBJ chief expected the Jordanian economy to grow at a pace of 3.3 percent in 2011 despite aggravating challenges mainly due to the Arab Spring uprisings.
He reported a 16 per cent drop in revenues from tourism, a 4.8 retreat in transfers of Jordanian expatriates working abroad and worsening imbalances in the public budget and the current account of the country's balance of payments.
© Arab News 2011
