Jordan Times
Sunday, January 24, 1999
Foreing currency trading remains at usual levels
By Suleiman Khalidi
AMMAN — Bankers in Jordan said Saturday that normal trading in foreign currency prevailed in the local exchange market despite a state of anticipation gripping the nation as it awaits the announcement of a successor to the Hashemite Throne.
Bankers said they did not witness an unusual demand on the U.S. dollar on the first day of business following a week-long holiday marking `Eid Al Fitr and His Majesty King Hussein's return to Jordan after six months of absence abroad undergoing treatment for cancer.
Mifleh Aqel, a prominent Jordanian banker at the Arab Bank told Reuters that “the Jordanian dinar is stable businessman and there is nothing to worry about and the sufficient quantities of the U.S. dollars are available and exchanged at the announced rates but there is slight margin of difference between the market price and the announced price.”
Another banker works at the foreign exchange department at a commercial bank said: “There is a surplus of foreign currencies.”
Another banker said:”There is no demand but rather to the contrary there is some satisfaction following the King's return and talk about the comprehensive changes.”
The exchange rate of the dinar in the local market has remained around its fixed price to the dollar and there was normal demand on the dollar and the market has enough surplus of foreign currency.
Bank trading in the U.S. dollars remained closed at the official rate of 708 fils to the dollar without any major transfers.
The Central Bank of Jordan (CBJ) which is backed by satisfactory level of reserves in foreign currency had last July met an increase in demand on the U.S. dollar to contain speculation on the Jordanian dinar following announcement of King Hussein's illness without undertaking any measures restricting the freedom of foreign exchange transfers.
Aqel said: “The reasons behind the increase in demand on the U.S. dollars last July was the King's illness but that illness has gone and the King has recovered and is now in good shape. Therefore matters should return to normal and those who sought refuge to the dollar should now return to the dinar.”
Another bankers said: “The anticipated political changes are readjustment of domestic affairs and the dinar is stable and there is no cause for concern.”
Jordanian bankers describe the CBJ's steps last July as reflecting wise management that led to reassuring the Jordanian people and resulted in curbing the speculation on the dinar.
In step seen as boost of confidence in the dinar denominatd assets, the monetary authorities have raised the returns on public debt tools and the certificates of deposits. Accordingly, the interest margin difference between the dinar and the dollar was in the vicinity of four per cent.
Bankers expressed great confidence that the monetary authorities will pursue measures taken in the past few years to liberalise the foreign exchange market.
Aqel said: “The reserves at the CBJ are at the satisfactory level and there is no way of reversing the liberalisation measures.”
On the other hand, Jordanian stocks rose in value in active trading at the bourse and as they were not affected by the wait and see mood that prevailed in Jordan concerning political developments