Circular on Reduction of Mandatory Cash Reserve Requirements

10/5/4374
20/7/1441 AH
15/3/2020
Circular to all licensed banks
Reduction of Mandatory Cash Reserve Requirements

Greetings,

In order to enhance available liquidity for financing, reduce the cost of credit, enhance the attractiveness of assets denominated in the Jordanian Dinar, and address the impacts resulting from the global spread of the coronavirus on economic sectors, it has been decided to amend Article No. (2) of the Mandatory Cash Reserve Instructions No. (68/2016) dated 21/12/2016 to read as follows:

The mandatory cash reserve in Jordanian Dinar and foreign currencies shall be calculated based on the monthly arithmetic average of daily customer deposit balances in Jordanian Dinar and foreign currencies during the month preceding the date of reserve deposit, for each type of deposit according to the following ratios:

Type of Deposit	Reserve Ratio
Current and Demand Accounts	7%
Savings, Notice, Time Deposits, and Certificates of Deposit	5%

This circular shall apply with effect from the reserve requirements for the month of April 2020.

Required statements shall be provided to us in paper form starting from the data for the month of April 2020, with the initial suspension of uploading reserve data to the Office Supervision System until it is programmed.

The attached statement is adopted in place of Statement No. (1) referred to in Article (6) of the Mandatory Cash Reserve Instructions No. (68/2016) dated 21/12/2016.

Banks may obtain financing without interest and without collateral from the Central Bank for the value of the reduction in mandatory cash reserves until the reduction enters into force.

Please accept our highest regards,

Enclosed

Governor
Dr. Ziad Faris