Jordan

Jordan initially fixed its exchange rate to the SDR, with monetary policy largely passive, but relaxed that as it liberalised in the late 1980s (and underwent a currency crisis); by the early 1990s it was pegging formally to the SDR but informally to the USD, and that became a firm exchange rate target from the mid-1990s.

Years	Targets and attainment	Classification
1974-84	exchange rate pegged to USD then from February 1975 formally to SDR, operationally more fix than target with actual margins much narrower than formal limits of 2.25%; elements of fiscal dominance; monetary policy instruments mainly direct, policy passive 1970s but more active (pro-growth) 1980s	augmented exchange rate fix AERF
1985-90	currency now allowed to move up to 6% against SDR parity; financial liberalisation (including forex market) and move towards indirect monetary instruments accelerated by currency crisis 1988; after brief float currency repegged to basket May 1989, repegged formally to SDR after large devaluation October 1990	loosely structured discretion LSD
1991-2000	formal peg to SDR but de facto peg to USD; forex market and capital account liberalised 1997; auction rate on central bank CDs (first issued 1993) becomes main instrument of monetary policy	loose exchange rate targeting LERT
2001-17	hard peg to USD de facto, now widely understood as fulcrum of policy; monetary policy clearly geared to maintaining that peg, regarded as ‘keystone of financial stability’ (SR 2012), by controlling short term interest rates, latterly within some sort of corridor, relative to US federal funds rate	full exchange rate targeting FERT

Selected IMF references: RED 1983 pp27-9; SR 1986 p4; Background Information on Selected Aspects of Adjustment and Growth Strategy 1995, chV and pp66-7; SR 1995 pp10, 20; SR 1997 pp8, 15; SR 2012 pp12, 21; SR 2017 pp18-19.

Additional source: Maziad (2011).

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