What Is the JOD (Jordanian Dinar)?
The Jordanian Dinar (JOD) is the state currency for the Kingdom of Jordan. Division of the dinar is in units of 10 dirhams, 100 qirshes, and 1000 fulus. The nation’s banknotes have denominations up to 50 dinars. In addition to its use in Jordan, the dinar also continues to circulate along with the Israeli shekel (ILS) in the West Bank, even after Israel took control of that region in 1967.
Understanding the JOD (Jordanian Dinar)
The JOD (Jordanian Dinar) has a relative valuation to other currencies as determined, in part, by a nation’s monetary policy, which is managed by its central bank, the Central Bank of Jordan (CBJ). Although many currency exchange rates are allowed to float on global markets based on supply and demand, others such as the Jordanian dinar are subject to exchange controls imposed by the government and the central bank.
The Central Bank of Jordan (CBJ) operates under objectives to “maintain monetary and financial stability, to ensure the convertibility of the Jordanian dinar, and to contribute in achieving the banking and financial stability in the Kingdom” and does so by “setting a pricing policy for the Jordanian Dinar compatible with the Jordanian economy.” Furthermore, the CBJ operates with a framework that emphasizes a fixed exchange rate as a nominal pillar of its monetary policy. Jordan's monetary policy works to establish Jordan’s ability to attract foreign investment, maintain the competitiveness of its exports, and keep inflation under control.
The dinar has been pegged to the International Monetary Fund's Special Drawing Rights (SDR) since October of 1995 and unofficially pegged to the U.S. dollar (USD), most recently at an exchange rate of approximately 0.709 dinars per USD, or about $1.41 per one Jordanian dinar. In August 2016, the International Monetary Fund Board of Directors approved a three-year extension of Jordan's participation in its Extended Fund Facility (EFF) to help support the nation's economy and to sustain more inclusive growth.
According to data from the World Bank, Jordan’s gross domestic product (GDP) measured in U.S. dollars grew 42 percent between 2010 and 2018 while the inflation rate dropped from 2.3 percent to 1.9 percent. The World Bank also predicts that the nation’s GDP will grow at an annual rate of 2.5 percent by 2020.
History of the Jordanian Dinar
The dinar became Jordan's official currency in July 1950. It replaced the Palestinian pound, a currency which had circulated in the British Mandate of Palestine and the Emirate of Transjordan, a British protectorate, since 1927. After independence, the country created the Jordan Currency Board to issue and circulate currency.
The Central Bank of Jordan (CBJ) took over production and monetary policy in 1959. Issued banknotes have the official name of the country, the Hashemite Kingdom of the Jordan, printed on them. The current, fourth series of banknotes issued by the CBJ have denominations of 1, 5, 10, 20, and 50 dinars.