Central Bank of Jordan

The Central Bank of Jordan (CBJ) is the Kingdom of Jordan’s monetary authority and the institution responsible for the stability and operation of the country’s banking and currency system. Its principal statutory objectives are to maintain monetary stability, preserve the convertibility of the Jordanian dinar, and support sustained economic growth in line with the general economic policy of the Jordanian government. Although its capital is wholly owned by the state, the CBJ operates as an independent and autonomous corporate body under its establishing legislation. The institution began operations on 1 October 1964, following preparations that had started in the late 1950s. Its legal foundation was established through the Central Bank of Jordan Law enacted in 1959, and it succeeded the Jordan Currency Board, which had managed currency arrangements from 1950. The bank is headquartered in Amman and serves the national economy rather than operating as a commercial financial-services brand. The CBJ is the sole issuer of Jordanian banknotes and coins. It manages the supply, distribution, replacement, and reissue of currency, maintains stocks of notes and coins, and issues commemorative coins. It also manages Jordan’s official reserves of gold and foreign currencies. Reserve management involves determining appropriate asset composition and investment opportunities while balancing safety, liquidity, and profitability. These reserves support confidence in the Jordanian dinar and help the authorities manage external and monetary risks. As banker and fiscal agent to the Jordanian government and public institutions, the CBJ maintains public accounts, processes transfers, opens letters of credit, manages certain loan and trade agreements, extends credit to the Treasury within its legal powers, and issues and administers public debt securities on behalf of the government. It also handles Jordanian subscriptions to international and regional financial institutions and implements payment arrangements between Jordan and other countries. The bank acts as banker to licensed commercial banks and specialized credit institutions. Its services include holding bank deposits, extending advances and rediscount facilities, providing credit-risk information, offering custody and electronic-clearing services, and buying or selling treasury bills and foreign exchange for banking-sector needs. It also licenses banks and their branches in Jordan. Banking supervision is another central part of the CBJ’s mandate. The institution conducts on-site and off-site surveillance, monitors solvency, liquidity, profitability, asset quality, management, and compliance with relevant accounting and auditing standards, and seeks to protect depositors and shareholders. Its regulatory approach includes attention to paid-up capital, capital adequacy, employee training, and the overall soundness of licensed institutions. The CBJ uses monetary and credit-policy instruments such as open-market operations, reserve requirements, and the discount rate. It advises the government on economic, fiscal, and monetary policy and participates in consultations with international financial organizations, including those connected with economic and structural-adjustment programs. It may also take measures under its legal authority to address monetary or economic problems and limit their effects on Jordan. Beyond its core central-banking functions, the CBJ has participated in the creation or development of several financial institutions and market infrastructures, including the Amman Stock Exchange, Jordan Mortgage Refinance Company, Jordan Loan Guarantee Corporation, and Deposit Insurance Corporation. These institutions have supported capital-market development, housing finance, credit guarantees, and depositor protection. The CBJ remains an active public financial institution whose principal role is to preserve monetary and banking-system stability in Jordan.

Jordan’s central-banking system developed before the creation of the Central Bank of Jordan. The Jordan Currency Board was established in 1950 to manage the country’s currency arrangements. During the late 1950s, the Jordanian authorities began preparing a more comprehensive monetary institution capable of supporting currency management, banking oversight, and broader economic policy. The Central Bank of Jordan Law was enacted in 1959, providing the legal basis for the new institution. The CBJ commenced operational procedures on 1 October 1964 and succeeded the Jordan Currency Board. Its creation reflected the need for a permanent national institution with responsibility not only for issuing currency but also for maintaining monetary stability and supporting the development of Jordan’s financial system. The bank was established as an autonomous corporate body, while its capital remained fully owned by the Jordanian government. Its capital was increased over time from one million Jordanian dinars to 18 billion Jordanian dinars, according to the historical account summarized in the reference material. The institution’s legal objectives have centered on three linked priorities: monetary stability, the convertibility of the Jordanian dinar, and sustained economic growth consistent with government policy. To pursue these objectives, the CBJ became the sole issuer of Jordanian notes and coins and assumed responsibility for ensuring that sufficient currency was available to the economy. Its currency role includes replacing worn or damaged notes, reissuing currency, maintaining inventories, and issuing commemorative coins. Reserve management became another foundational responsibility. The CBJ holds and manages official reserves of gold and foreign currencies, selecting investment arrangements according to considerations of safety, liquidity, and profitability. These reserves contribute to confidence in the national currency and provide an important foundation for the country’s exchange-rate and external-payment arrangements. Over time, the CBJ developed into the banker and fiscal agent of the Jordanian government and public institutions. It maintains government accounts, executes transfers, manages letters of credit and certain financing agreements, administers public debt securities, and manages Jordan’s participation in international and regional financial institutions. It also acts as banker to licensed banks and specialized credit institutions by holding deposits, providing advances and rediscount facilities, supporting clearing and custody functions, and supplying credit-risk information. Bank supervision expanded the CBJ’s role beyond traditional currency and reserve functions. The bank licenses banks and branches, performs on-site and off-site examinations, and monitors capital adequacy, solvency, liquidity, asset quality, profitability, management, and compliance with financial reporting standards. Its supervisory objectives include protecting depositors and shareholders and maintaining confidence in the wider banking system. The CBJ has also used its statutory powers to regulate the quantity, quality, and cost of credit. Its listed monetary-policy instruments include open-market operations, reserve requirements, and the discount rate. The bank advises the government on economic, fiscal, and monetary policy and has participated in consultations with international financial organizations, particularly in relation to economic and structural-adjustment programs adopted from 1989 onward. The institution has contributed to the development of Jordan’s financial infrastructure through participation in the establishment of the Amman Stock Exchange, Jordan Mortgage Refinance Company, Jordan Loan Guarantee Corporation, and Deposit Insurance Corporation. These initiatives broadened the institutional framework around capital markets, housing finance, credit guarantees, and depositor protection. The CBJ’s governors have included Khalil Al-Salem, Mohammed Said Nabulsi, Hussein Al-Qasim, Mohammed Said Nabulsi in a later term, Mohammed Said Shahin, Faris Abdel Hamid Sharaf, Umayya Toukan, Ziad Fariz in two periods, and Adel Al-Sharkas from 2022 onward. Today, the bank remains Jordan’s central monetary and supervisory institution, combining currency issuance, reserve management, government banking, monetary-policy implementation, and prudential regulation.

• 2022

  Adel Al-Sharkas becomes governor

  [1]Central Bank of Jordanen.wikipedia.org

  Adel Al-Sharkas began serving as governor of the Central Bank of Jordan.

• 1989

  Expanded role in economic-policy consultations

  [1]Central Bank of Jordanen.wikipedia.org

  The CBJ took part in recurring consultations with international financial organizations linked to Jordan’s economic and structural-adjustment programs.

• 1964

  CBJ begins operations

  [1]Central Bank of Jordanen.wikipedia.org

  The Central Bank of Jordan began operational procedures on 1 October 1964 and succeeded the Jordan Currency Board.

• 1959

  Central Bank of Jordan Law enacted

  [1]Central Bank of Jordanen.wikipedia.org

  Jordan enacted the legislation providing the legal foundation for the country’s central bank.

• 1950

  Jordan Currency Board established

  [1]Central Bank of Jordanen.wikipedia.org

  The Jordan Currency Board was established as the predecessor institution responsible for managing Jordan’s currency arrangements.

Jordan’s independent public monetary authority and banking-sector regulator.

• Currency services · 1964

  Jordanian currency issuance

  The CBJ is the sole issuer of Jordanian banknotes and coins. It plans currency availability, maintains inventories, distributes notes and coins, replaces worn or damaged currency, and issues commemorative coins.

• Central-banking policy · 1964

  Monetary and credit policy

  The bank implements monetary and credit policy to support monetary stability, dinar convertibility, and sustainable economic growth. Its available instruments include open-market operations, reserve requirements, and the discount rate.

• Reserve management · 1964

  Foreign-exchange and gold-reserve management

  The CBJ manages Jordan’s official holdings of gold and foreign currencies. Its reserve-management approach considers the security, liquidity, and profitability of investments while supporting confidence in the Jordanian dinar.

• Financial regulation · 1964

  Banking supervision and licensing

  The CBJ licenses banks and branches and conducts on-site and off-site supervision. It monitors capital adequacy, solvency, liquidity, asset quality, profitability, management, and compliance with relevant accounting and auditing standards.

• Public-sector financial services · 1964

  Government banking and fiscal-agent services

  The bank maintains government and public-institution accounts, processes transfers, opens letters of credit, manages certain financing agreements, administers public debt securities, and supports Jordan’s participation in international and regional financial institutions.

• Banking infrastructure · 1964

  Banker-to-banks services

  The CBJ holds deposits for banks and specialized credit institutions, provides advances and rediscount facilities, supplies credit-risk information, and supports custody, electronic clearing, treasury-bill, and foreign-exchange operations.

1. 1Central Bank of Jordanen.wikipedia.org
2. 2Central Bank of Jordan official websitecbj.gov.jo