Jordan Times
Thursday, September 9, 2004
Dinar-dollar link will be
maintained — Abu Hammour
By Mahmoud Al Abed
AMMAN — The government will not reconsider its monetary policy under which the
dinar is linked to the dollar, Finance Minister Mohammad Abu Hammour told
participants on the second and final day of a symposium held by the Jordan
Development Centre
“We are comfortable with this linkage,” he said stressing that to ensure
economic stability, it is essential to maintain the stability of the dinar
exchange rate and sustain a comfortable level of foreign currency reserves.
By the end of June this year, the Central Bank of Jordan reported $4.5 billion
in foreign reserves.
The minister also said that Jordan will not go back on the adjustment measures
it has adopted for 15 years to rectify the economic situation.
After the June graduation of the International Monetary Fund (IMF)-guided
adjustment programme, the Kingdom has now embarked on a national programme based
on self-reliance, he indicated.
According to Abu Hammour, the top priority of the three-year national economic
adjustment programme is to improve the living conditions of citizens by
sustaining a growth rate of six per cent throughout the plan.
If achieved, he said, it would create jobs for Jordanians and address the root
causes of poverty.
Jordan achieved a growth rate of 7.2 by mid year 2004, compared to the same
period last year, the minister of planning announced this week.
In 2003, the year that witnessed the US war against Iraq, the country recorded a
growth of 3.3 per cent.
Although external assistance is likely to decline, Abu Hammour said, the
government will seek to reduce the budget deficit down to 2.5 per cent from the
current 3.9 per cent to gross domestic product.
Responding to a question on the prices of oil derivatives, he pointed out that
the government will seek to liberalise the prices of these essential products
over the coming five years. He noted that the budget was drafted on the basis of
$26 for each barrel of oil. Any additional dollar to that price means a $30
million extra burden on the budget.
Asked about the pension allowances for civil and military employees, the
minister said they will not be increased for any category. He described the
recent raise in the salaries of ministries' secretaries general as a bonus that
would not reflect in the value of their pension salaries.