Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

JORDAN

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
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(Position as of December 31, 2006)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: February 20, 1995.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2006.
International security restrictions
Other security restrictionsThe Central Bank of Jordan (CBJ) instructed banks to comply with all UN Security Council resolutions regarding freezing of funds. Banks are required to inform the CBJ of financial transactions by natural or legal persons listed by the UN in accordance with Security Council resolutions.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of Jordan is the Jordanian dinar.
Other legal tenderThe 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.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo restrictions apply on transactions in domestic or foreign currency.
Use of foreign exchange among residentsResidents may use foreign exchange for transactions.
Payments arrangements
Bilateral payments arrangements
InoperativeThere is an inoperative arrangement with the Syrian Arab Republic.
Administration of controlNo.
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.
References to legal instruments and hyperlinksn.a.
Resident Accounts
Foreign exchange accounts permittedThese accounts are permitted without any restrictions.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadn.r.
Accounts in domestic currency convertible into foreign currencyNo.
References to legal instruments and hyperlinksn.a.
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 accountsThe funds in the blocked bank accounts of certain individuals associated with the former government of Iraq have been transferred to the frozen deposits management fund.
References to legal instruments and hyperlinksFrozen Deposits Management Law No. 33, 2003.
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 listThe negative list includes certain goods that are prohibited for national security reasons.
Import taxes and/or tariffsThe maximum tariff rate is 30%, excluding cigarettes and alcoholic beverages, to which higher rates apply.
State import monopolyOil imports are effected by a state agency.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasLicenses for exports are not required, except for wheat and barley products.
With quotasYes.
Export taxesNo.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsYes.
Repatriation requirementsNo.
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 is required.
Controls on personal capital transactions
Transfer of gambling and prize earningsGambling is illegal in Jordan, but the transfer of prize earnings is not restricted.
References to legal instruments and hyperlinksn.a.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)Licensed banks may lend to nonresidents who have business activities in Jordan.
Lending locally in foreign exchangeLicensed banks may lend to residents and nonresidents up to 30% of their foreign exchange deposits (after deducting the legal monetary reserve in the CBJ). Lending in foreign exchange is restricted to foreign exchange earners.
Investment regulations
Abroad by banksNo controls apply except for foreign exchange exposure limits.
Open foreign exchange position limitsOpen positions in individual foreign currency (excluding dollars) are limited to a total of 5% of bank equity. The aggregate open position (and that on dollars) is limited to 15% of bank capital.
Provisions specific to institutional investors
Insurance companies
Currency-matching regulations on assets/liabilities compositionNo controls apply, except for foreign exchange exposure limits.
Pension funds
Limits (max.) on securities issued by nonresidentsn.a.
Limits (max.) on investment portfolio held abroadThe Social Security Corporation (SSC) is not allowed to invest more than 10% of its assets abroad.
Limits (min.) on investment portfolio held locallyThe SSC must invest at least 90% of its assets locally.
Currency-matching regulations on assets/liabilities compositionn.a.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksn.a.
Changes during 2006
No significant changes occurred in the exchange and trade system.

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