Annual Report on Exchange Arrangements and Exchange Restrictions 2005
Chapter

JORDAN

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2005
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(Position as of December 31, 2004)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: February 20, 1995.
Exchange Arrangement
CurrencyThe currency of Jordan is the Jordanian dinar.
Other legal tenderThe Central Bank of Jordan (CBJ) issues commemorative gold coins, which, although legal tender, do not circulate but are available to residents and nonresidents.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe dinar is officially pegged to the SDR, but in practice it has been pegged to the dollar since late 1995. The difference between the CBJ’s buying and selling rates is 0.3%.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketLicensed banks may buy forward an unlimited amount of foreign currency against dinars from their customers, and they may sell forward foreign currencies against dinars to their customers to pay for imports into Jordan.
Arrangements for Payments and Receipts
Prescription of currency requirementsn.a.
Payments arrangements
Bilateral payments arrangements
InoperativeThere is an inoperative arrangement with the Syrian Arab Republic.
Administration of controlNo.
International security restrictions
In accordance with UN sanctionsRestrictions are applied to financial transactions involving assets of the Taliban in accordance with UN Security Council Resolution No. 1267.
Payments arrears
OfficialPayments arrears to bilateral creditors have been rescheduled under a Paris Club agreement.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permittedThese accounts are permitted without restriction.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadn.r.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Approval requiredFor statistical purposes, proof of domicile is required when nonresident accounts are opened.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsBank accounts of certain individuals associated with the former government of Iraq are blocked.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measures
Negative listThis comprises imports of certain goods that are prohibited for national security considerations.
Import taxes and/or tariffsThe maximum tariff rate is 30%, excluding cigarettes and alcoholic beverages on which higher rates apply.
State import monopolyOil imports are effected by a state agency.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasLicenses for exports are not required, except for exports to countries that have bilateral agreements with Jordan.
With quotasYes.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsThere are no controls on these transactions, except for exposure limits.
Controls on direct investment
Inward direct investmentNonresident investments are limited to a maximum of 49% ownership or 50% subscription in shares in the following major sectors: commerce and trade services, construction, contracting, and transportation. The amount of investment in any one project must total at least JD 50,000. Investments in the following sectors are not permitted for nonresidents: investigation and security, quarries for natural sand and stones, sport clubs, and passenger and freight road transportation services.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsThese transactions are allowed only if reciprocal agreements exist. Cabinet approval must be obtained.
Controls on personal capital transactions
Transfer of gambling and prize earningsGambling is illegal in Jordan, but the transfer of prize earnings is not restricted.
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)Licensed banks may lend to nonresidents up to 30% of their foreign exchange deposits.
Lending locally in foreign exchangeLicensed banks may lend to residents and nonresidents up to 30% of their foreign exchange deposits.
Investment regulations
Abroad by banksNo controls apply except for foreign exchange exposure limits.
Open foreign exchange position limits
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investorsNo.
Currency-matching regulations on assets/liabilities compositionNo controls apply except for foreign exchange exposure limits.
Other controls imposed by securities lawsExcept for the sectoral controls described under direct investments, there are no other controls.
Changes During 2004
No significant changes occurred in the exchange and trade system.

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