US rate hike may affect Jordan loan costs
The U.S. Federal Reserve Board raised interest rates by a quarter of a percentage point, leading to increased borrowing costs in Jordan and other Arab countries. It is expected that interest rates on loans and deposits will be directly affected by this decision. The rise in American interest rates caused the dollar to strengthen against major currencies, which in turn raises the external debt costs for Arab countries and widens the trade deficit, especially in nations that rely heavily on imports. Additionally, this interest rate hike reduces gold's gains and impacts oil markets, with prices likely to decline due to the dollar's appreciation. In Jordan, forecasts indicate an increase in loan prices, and the Central Bank is expected to respond accordingly, with some Arab banks raising interest rates by 25 basis points.
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