Kingdom of Jordan with a population of 5.9 million obtained independence from the United Kingdom in 1946. As an Arab nation located in the volatile Middle East, regional stability is a paramount issue. Some of the higher profile regional conflicts at present include the Iran nuclear standoff with the West, Israel - Lebanon military conflict, Iraq - U.S./Coalition war in addition to domestic terror threats.
Economic Statistics
Total GDP using as measured by purchasing power parity stands at $27 billion USD (2005) with corresponding GDP/Capita at $4,700 USD. Market GDP came in at $11.51 billion USD (2005). GDP growth for 2006 is estimated at 5 percent, 2007 at 5 percent. Other GDP growth quotes include year 2005 at 7.2 percent. Inflation for year 2006 is projected at 6.9 percent, 2007 at 5.8 percent. Other inflation quotes include year 2005 at 3.5 percent, 2004 at 3.4 percent, 2003 at 1.6 percent . The current account is in deficit at 18 percent of GDP, quite high due to higher oil prices. The trade component is in deficit at a very high level of $4.55 billion USD (2005). External debt stands at $8.5 billion USD (2005). Jordan is a net electricity importer, net oil importer. Official unemployment at 15 percent. Foreign exchange reserves are at healthy level of $4.7 billion USD equivalent (2005) representing 5 months of import coverage. Repo interest rate at 8.25 percent.
CURRENCY: ISO Symbol ‘JOD’, Jordanian dinar. At time of review on July 24, 2006 the Jordanian dinar was valued at 0.7085 JOD to the US-dollar (USD) and/or 0.8954 JOD to the Euroland euro (EUR). Currency regime in place is that of fixed nominal exchange rate peg to the USD. The dinar has been stable over the last few years realizing only a 10 percent depreciation from 2002-04.
CURRENCY HISTORY: the dinar has been in circulation since 1949 when it replaced the Palestinian pound at par. Since October 1995, the dinar has been fixed to the IMF’s ‘Special Drawing Rights’ (SDR) and to the USD at 0.709 JOD and/or 1.41 USD to 1 JOD. Historical exchange quotes for the dinar include: from 1989 to 1996, the dinar was pegged to a basket of currencies with year 1993 valuation at 0.6928 JOD to the USD, 1994 at 0.6987, 1995 at 0.7005. Currency crisis dates include October 1988.
CURRENCY FORECAST: currency risk includes the level of foreign grants & remittances from abroad, continued high oil prices igniting rising inflation pressures, fresh water availability, high external debt, difficult macro-economic variables including the current account deficit shortfall and the possibility for a wider Middle East war. Conversely, currency stability is underpinned by good level of reserve protection and sound market confidence with the Jordanian monetary authority.
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