What is the Jordanian Dinar – JOD?
The national currency of Jordan is the Dinar. The abbreviation or currency symbol for the Jordanian dinar is designated by JOD. The dinar has smaller denominations or subunits. In particular, one dinar is equivalent to 10 dirhams, 100 qirsh and 1,000 sons. The dinar is also distributed in the West Bank of Israel.
The Jordanian dinar explained
The dinar became the official currency of Jordan in July 1950. It replaced the Palestinian pound, a currency that had circulated in the British Palestine Mandate and the Emirate of Transjordan, a British protectorate, since 1927. After independence , the country created the Jordan Currency Board. to issue and circulate money.
The Central Bank of Jordan (CBJ) resumed production and monetary policy in 1959. The country’s official name, the Hashemite Kingdom of Jordan, has been published. The fourth current series of banknotes issued by the CBJ has denominations of 1, 5, 10, 20 and 50 dinars. Dinarian coins were labeled in Arabic until 1992, then changed to English. The dinar has been pegged to the US dollar for twenty years.
The Jordanian country has pegged its local currency to the US dollar to ensure the stability of its financial system. In general, if a country’s exchange rate fluctuates wildly, it is difficult to attract foreign investment, and capital flows can leave the country in search of more stable investment.
By pegging the dinar to the dollar, Jordan benefits from a stable monetary regime, which means that their local banks are likely to attract deposits. A stable currency also increases foreign direct investment in Jordan. However, by pegging the dollar, the Jordanian central bank cannot try to affect the value of its currency on the free market in response to changing economic conditions such as a recession or overheated growth. Likewise, if the American dollar gains or loses its strength due to the American economic situation, it can change the purchasing power of the dinar even if the situation of the Jordanian economy can be very different.
Key points to remember
- The Jordanian dinar – JOD – is the national currency of Jordan.
- The dinar is pegged to the US dollar at the rate of 0.7090 per dollar.
- By pegging the dinar to the dollar, Jordan benefits from a stable monetary regime, which means that their local banks are likely to attract deposits.
Real example of the Jordanian dinar
The JOD is indexed to the US dollar at a fixed exchange rate of 0.7090 for each dollar. For example, suppose you send a bank transfer to Jordan and want to convert $ 1,000 to dinars. The exchange would result in 790 Jordanian dinars. Because it is anchored, this exchange rate will persist over time, unlike currencies that float in the market and thus change their exchange rate over time.