Regulatory Alerts2022-06-07
Added · Updated
Central Bank of Jordan Memorandum No. 2000/179 on Foreign Currency Asset/Liability Management
The Central Bank of Jordan mandates that commercial banks limit foreign currency investments in domestic money markets to 40% of their foreign currency capital, with specific exclusions for related parties and unrated institutions. Banks are permitted to invest up to 30% in domestic capital market securities rated investment grade, with further caps of 20% on unrated debt and 15% on blue-chip shares or investment funds. Islamic banks are authorized to provide foreign currency financing and investments under similar percentage limits, subject to counterparty credit ratings. Additionally, banks must maintain overnight foreign currency positions within 5% of shareholders' equity (15% aggregate limit), report daily investment portfolios, and adhere to strict derivative trading and risk management guidelines.