Jordanian Dinar (JOD) - Currency of Jordan

Some interesting facts that we bet you did know about the Jordan Currency:

1. The short form of the Jordanian Dollar is JOD, and unofficially it is also referred as JD.
2. The banknotes that are currently in circulation are 1, 5, 10, 20, 50 Dinars.
3. Most often used coins are ​1⁄2, 1, ​2 1⁄2, 5, 10 piastres/qirsh, ​1⁄4, ​1⁄2, and 1 Dinar.

History of Jordan Dinar

Jordan's legal currency, the dinar, was introduced and put into circulation in 1950. The term "dinar" has its origins in antiquity. Its origins can be traced back to the Roman "denarius," a kind of silver currency used during the Roman Republic. In the month of July 1950, the dinar was adopted as Jordan's national currency. It usurped the position of the Palestinian pound, which had been used as a form of currency during the 1927 era in the British Mandate of Palestine and the British protectorate of the Emirate of Transjordan.

Today, Jordan only accepts the Jordanian dinar as legal tender. Back in 1946, Jordan succeeded in gaining full autonomy from Britain, at which point the process of generating and issuing its very own currency began. After gaining freedom, the country established the Jordan Currency Board. It looked after the production and distribution of currency. When the Central Bank of Jordan was founded in 1964, the initial set of banknotes bearing King Hussein's depiction was printed in denominations of the respective dinars: 0.5, 1, 5, and 10. The Hashemite Kingdom of Jordan, (the formal name of the nation), appears on the issued dinars.

Prior to 1992, dinarian coinage had Arabic denominations/names. To name a few, they were termed qirsh, fils, dinar, and dirham. However, only the titles for the fils and dinars were used in English. After that, since 1992, English titles/denominations were provided in Dinar and either qirsh or piastres instead of the fils and dirham names that were once used in Arabic.

Since 1995, the dinar has had a fixed exchange rate against the dollar. Instead of relying on the Jordanian economy, the currency of Jordan is pegged to the US Dollar. Because it is established at a fixed exchange rate, the currency continues to remain resilient. This implies that regardless of Jordan's economic situation, the Central Bank of Jordan cannot change the worth of its currency.

Speaking of popularity, the Jordanian Dinar holds quite a value. Following the Kuwaiti dinar, Bahraini dinar, and Omani rial respectively, the Jordanian dinar stands out to be the fourth best among the world's top currencies. In addition to Jordan, Bahrain, Algeria, Libya, Iraq, Tunisia, and Kuwait are some of the other nations that use the word "dinar" to refer to their national currency.

Factors Affecting Jordan Dinar

The stability and the value of a currency are influenced by a number of variables. This includes the inflation rate, foreign investments, trade balance, and indicators of economic and political security. Given below are some of the elements that support/might affect the stability of the Jordanian dinar.

1. Fixed to the USD:

A set exchange rate that pegs the Jordanian dinar to the US dollar has contributed to the durability of the currency and prevented value fluctuations. The main justification for Jordan's currency peg to the USD is exactly the same as for any other nation: financial security. The USD remains one of the world's most steady and extensively distributed currencies. As a result, the worth and value of the tender do not change drastically. Here, Jordan maintains its exchange rate and financial structure by pegging its money to US dollars.

2. Tourism:

Jordan has a flourishing tourism industry. The inflow of foreign money from visitors maintains the stability and value of the nation's currency. A downfall in the sector can cause some effects on the currency.

3. Economic steadiness:

With a consistent rise in its gross domestic product (GDP) rate and an unusually low inflation rate, Jordan has kept its finances in check over the years. The government has put in place a number of economic policies to encourage development and draw in foreign capital.

4. Political harmony:

This is a major factor that affects any currency. The governmental stability of Jordan is widely recognised, and this has aided in luring outside capital and fostering economic expansion. Additionally, the administration has taken steps to reduce corruption and raise transparency, which has been quite helpful in winning investors' faith.

5. Balance of trade:

Since Jordan's exports are worth more compared to its imports, it has maintained a good trade balance. This, in turn, has supported the market value of the currency and strengthened the nation's foreign exchange reserves. Another reason involves the strong economic ties between Jordan and its neighbours. Countries like Saudi Arabia and the United Arab Emirates are significant suppliers of remittances and foreign investment in Jordan. This has helped the nation to maintain the stability of its currency.

6. Foreign investment:

In the past few years, Jordan has brought in a large amount of foreign investment, particularly in industries like real estate, tourism, and renewable energy. This has further strengthened the national currency and supported economic development.

7. Monetary strategy:

In order to keep prices stable and promote growth in the economy, the Central Bank of Jordan has adopted solid monetary regulations. For instance, to encourage economic activity, the central bank continues to maintain the interest rates at their modest. This has served to draw in plenty of foreign investment as well as boost the overall worth of the currency.