Regulatory Alerts2009-02-01
Added · Updated
Foreign Currency Instructions
The Central Bank of Jordan issued these Instructions to liberalize foreign currency regulations, permitting unrestricted entry and exit of payment means and gold, as well as unrestricted visible, invisible, and capital payments. Licensed banks are authorized to hold foreign currencies up to 15% of total external liabilities against imports or one million Jordanian Dinars, whichever is greater, and must sell excess amounts within one week. The document allows banks to manage foreign currency investment portfolios, engage in forward transactions without ceilings, and open resident and non-resident accounts with unrestricted withdrawals. Additionally, banks must submit specific monthly reports to the Central Bank, and a 1% commission is levied on foreign currency transfers, excluding government and diplomatic entities.
Foreign Currency Instructions
Chapter One Entry and Exit of Jordanian and Foreign Payment Means and Gold
Article (1): The entry and exit of banknotes, coins, Jordanian and foreign payment means, and gold into and out of the Kingdom is permitted without any restrictions.
Article (2): Visible and invisible payments, as well as capital payments, are conducted without any restrictions.
Chapter Two Dealing by Licensed Banks in Foreign Currencies
Article (3): A licensed bank may hold foreign currencies up to an amount not exceeding 15% of its total external liabilities against import operations into the Kingdom in foreign currency, or the equivalent of one million Jordanian Dinars, whichever is greater. The licensed bank must sell any amount exceeding this ratio to other licensed banks in the Kingdom or to the Central Bank within one week from the date of the excess.
Article (4): Licensed banks are permitted to manage investment portfolios and mutual investment funds in foreign currencies on behalf of their clients, and to deal in foreign currencies on a margin basis, swap assets, and use other instruments in accordance with instructions and memoranda issued by the Central Bank on this matter.
Article (5): a- Licensed banks may purchase foreign currencies from their clients in exchange for Jordanian Dinars on a forward basis and without any ceilings. b- Licensed banks may sell foreign currencies to their clients in exchange for Jordanian Dinars on a forward basis to cover the prices of imports into the Kingdom.
Chapter Three Accounts of Residents and Non-Residents
Article (6): a- Licensed banks may open accounts for non-residents in Jordanian Dinars and/or foreign currencies, provided that proof is furnished confirming the account holder's status as a non-resident. b- If the account is for a Jordanian person who has acquired non-resident status, they must provide proof of their residence abroad every three years; otherwise, the non-resident account will be converted into a resident account in foreign currency. c- Withdrawals and transfers from a non-resident account are permitted without any restrictions.
Article (7): a- Any person is permitted to hold resident accounts in foreign currencies at licensed banks without any ceilings. b- Withdrawals and transfers from a resident's foreign currency account are permitted without any restrictions.
Chapter Four Data and Reports
Article (8): The main departments of licensed banks shall prepare reports and data related to foreign currency dealing accounts for all their branches on forms approved by the Central Bank.
Article (9): Licensed banks shall provide the Central Bank with the following monthly statements: a- Total operations for the export of Jordanian banknotes, coins, and foreign payment means. b- Total loans granted and investments abroad in foreign currency. c- Total payments made from resident accounts in foreign currency. d- Total prices of goods imported into the Kingdom and paid for in Jordanian Dinars. e- Total value of opened letters of credit and amounts actually transferred for importing goods to free zones or passing through transit. f- Total transfers to cover invisible payments made in exchange for Jordanian Dinars. g- A statement of accounts opened with correspondents abroad.
Chapter Five General Provisions
Article (10): The Central Bank may publish buying and selling prices for foreign currencies.
Article (11): Free zones in the Kingdom are considered as any foreign country for the purposes of these Instructions.
Article (12): The Central Bank shall collect a commission of one percent (1/1000) on foreign currency transfers, except for transfers by government entities, public institutions, and diplomatic and charitable bodies.
Article (13): Reference shall be made to the Central Bank on any matter not addressed by these Foreign Currency Instructions.
Article (14): All previous instructions and memoranda issued by the Central Bank based on the provisions of the Temporary Foreign Currency Control Law No. (95) of 1966 that conflict with the provisions of these Instructions are repealed.
- These Instructions shall come into effect from the date of their publication in the Official Gazette.
Issued in the Official Gazette No. (4219) dated 16 / July / 1997.
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