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Untitled Document
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Jordan |
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The currency of Jordan is Jordan Dinar (JD), which is diveded ito 1,000 Fils.
The Central Bank of Jordan (CBJ) oversees foreign currency transactions and sets the exchange rate. Besides issuing banknotes, it also issues commemorative gold coins, which, although legal tender and available to residents and nonresidents, do not circulate. Since 1998 when the Foreign Exchange Control Department was abolished, there has been no exchange control in Jordan.
Jordan Dinar had been linked to Pound Sterling before 1971. After that Jordan maintained an Official Rate fixed to the U.S. Dollar until 1974. During the year 1974, under the pressure of inflation, which was caused by the political fluctuations, the Dinar was made a controlled, floating currency. In 1975, the Dinar was linked to the SDR.
In late 1980s, with large currency outflows, the problem of erosion in foreign exchange reserves became very serious. Jordan responded to it by putting the Dinar on a managed float, devaluing the unit, and restricting capital outflows. Later, with the further devaluation of Dinar, it was pegged to a trade-weighted basket of currencies. A two-tier exchange rate system was introduced in July 1989. In this system, there is a fixed Official Rate applying to public sector imports of essential goods, certain medicines and remittances to Jordanians studying abroad. While a Floating Rate, which was subject to supply and demand, governed all other transactions. However, this system only lived shortly and was replaced by an Effective Rate in Fubruary 1990. This Effective Rate was officially linked to the SDR on a trade-weighted basis.
Presently, Jordan maintains a unitary exchange rate structure. The Dinar is officially pegged to the SDR, but in practice, it has been pegged to the U.S. Dollar since late 1995. The exchange rate has since remained at 0.708 (buy) and 0.710 (sell) Dinar to the dollar. The Dinar fluctuates against other currencies according to market force.
Resources of reference include:
1. World Currency Yearbook. (WCY)
2. IMF Annual Report on Exchange Arrangement and Exchange Restriction. (IMF)
3. "2000 Country Reports on Economic Policy and Trade Practices: Jordan ", the Bureau of Economic and Business Affairs, U.S. Department of State, March 2001 (CR2000)
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Date
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Changes
to the exchange rate regime
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Dinar per U.S. Dollar
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| 1 July 1950 | The Jordan Dinar (JD), divided into 1,000 Fils, was created with an Official Rate then equal to the Pound Sterling, or US$2.80. Jordan also rejoined the Sterling Area at that time. (WCY 1984, p. 421) | 0.357 | | 1 July 1950 | The Jordan Dinar (JD), divided into 1,000 Fils, was created with an Official Rate then equal to the Pound Sterling, or US$2.80. Jordan also rejoined the Sterling Area at that time. (WCY 1984, p. 421) | 0.357 | | 15 August 1971 | Following the de facto devaluation of the U.S. Dollar, the Jordan Dinar broke its link to the Pound Sterling and kept its exchange rate against the U.S. unit unchanged, thus effecting a de facto devaluation. (WCY 1984, p. 421) | | | 29 December 1971 | In the wake of the de jure devaluation of the U.S. Dollar, the Dinar's gold content was reduced 7.89%, thereby maintaining the Official Rate of US$2.80. A 4.5% fluctuation range was also introduced. (WCY 1984, p. 421) | | | 23 June 1972 | The floating of the Pound Sterling and the breakup of the Sterling Area terminated the Dinar's monetary privileges connected with membership in the Sterling Area. (WCY 1984, p. 421) | | | 19 February 1973 | Following the devaluation of the U.S. Dollar, the gold content of the Dinar remained unchanged, thus realigning the Official Rate to US$3.11. An Effective Rate was also established with buying and selling rates revised periodically. (WCY 1984, p. 421) | 0.322 | | 1 July 1974 | The Effective Rate was placed on a controlled, floating basis. (WCY 1984, p. 421) | | | 31 December 1974 | | 0.314 | | 22 February 1975 | The Effective Rate was linked to the SDR at an exchangek value of SCR 2.57895 per Jordanian unit, within a margin of 2.25%. The exchange rate has, however, been allowed to fluctuate within a wider band in recent years. (WCY 1988-1989, p. 741) | | | 31 December 1975 | | 0.330 | | 31 December 1976 | | 0.331 | | 31 December 1977 | | 0.314 | | 31 December 1978 | | 0.293 | | 31 December 1979 | | 0.295 | | 31 December 1980 | | 0.309 | | 31 December 1981 | | 0.339 | | 31 December 1982 | | 0.351 | | 31 December 1983 | | 0.372 | | 31 December 1984 | | 0.405 | | 31 December 1985 | | 0.368 | | 31 December 1986 | | 0.344 | | 31 December 1987 | | 0.329 | | 15 October 1988 | The Dinar was put on a managed float and devalued 11.9%. (WCY 1988-1989, p.741) | | | 31 December 1988 | | 0.477 | | February 1989 | Exchange houses were closed and the Dinar was devalued 13.2% to US$1.7621. (WCY 1988-1989, p.741) | 0.568 | | 30 May 1989 | Jordan's currency was pegged to a trade-weighted basket of currencies. (WCY 1988-1989, p.741) | | | 31 July 1989 | A two-tier exchange rate system was established. In addition to a fixed Official Rate applying to public sector imports of essential foods, certain medicines and remittances to Jordaninas studying abroad, a Floaitng Rate, subject to supply and demand, was created to govern all other transactions. (WCY 1988-1989, p.741) | | | 3 September 1989 | The conversion of 50% of export receipts came under the Floating Rate. (WCY 1988-1989, p.741) | | | 31 December 1989 | Floating Rate: 1.5390. | 0.648 | | 17 February 1990 | The dual rate system was terminated and an Effective Rate reestablished, linked to the SDR on a trade-weighted basis for all transactions. (WCY 1990-1993, p.813) | | | 31 December 1990 | | 0.665 | | 31 December 1991 | | 0.675 | | 4 November 1992 | Exchange houses were permitted to reopen. (WCY 1990-1993, p.813) | | | 4 November 1992 | Exchange houses were permitted to reopen. (WCY 1990-1993, p.813) | | | 31 December 1992 | | 0.675 | | 31 December 1992 | | 0.691 | | 31 December 1993 | | 0.704 | | 30 April 1995 | | 0.694 | | 31 December 1995 | | 1.430 |
Notes: Annotation of the exchange rates listed in the right column of the table.
1950-07-01---1973-02-18: Official Rate (fixed to Pound Sterling or U.S. Dollar);
1973-02-19--1989-07-30:Effective Rate established (linked to SDR, managed float, or pegged to a trade-weighted basket);
1989-07-31---1990-02-17 : The fixed Official Rate of the Two-tier exchange rate system;
1990-02-17--- : Effective Rate (linked to the SDR on a trade-weighted basis) replaced the dual exchange rate. |
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