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Jordanian central bank cuts rates again

THE Central Bank of Jordan cut interest rates for the third time in five months yesterday, lowering interest rates by 0.5 percentage points.

It also reduced the rate of compulsory cash reserves on bank deposits to stimulate lending and boost liquidity.

The head of the bank, Umayya Toukan, said the cuts were prompted by pressures from a deepening world recession coupled with reduced economic growth.

The bank said it lowered the rate at which it lends money to other banks to 5.25 percent from 5.75 per cent, while the official rate fell to 5 percent from 5.5 percent.

The obligatory cash reserve requirement on deposits in local and foreign currencies was reduced to 7 percent from 8 percent - a move expected to provide more than $250 million in local liquidity.

Jordan lacks the wealth of its oil-rich neighbors. It relies largely on tourism, worker remittances and investments.


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