Rate Cut Will Struggle To Spur Lending

The decision by the Central Bank of Jordan (CBJ) to lower its benchmark repo and discount interest rates by 50bps on February 22, to 4.00% and 4.25% respectively, illustrates the bank's ongoing concerns over the weakness of the domestic economy. It also highlights the CBJ's growing frustrations over commercial banks' unwillingness to pass previous interest rate cuts onto their customers. Banking sector aggregate credit growth remains weak, coming in at just 0.9% y-o-y in December 2009 (though this does make a change from five consecutive months of slightly negative annual growth from July to November 2009). Meanwhile, deposit growth remains

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