AMF disburses loan worth $38m to Jordan to support reforms

The financial institution is considering granting further credit to the Arab nation as it manages the economic fallout from the coronavirus pandemic

The Arab Monetary Fund building in Abu Dhabi. The AMF urged central banks to ensure the continuity of RTGS and Swift networks during natural disasters. Private archive of Peter Mlodzianowski, Bucks (UK).Show less

The Arab Monetary Fund (AMF) disbursed a $38 million (Dh139.5m) loan to Jordan to support the country's economic reforms and boost growth as it handles the fallout of the coronavirus pandemic.

The funding is the second tranche of a loan within the framework of its structural adjustment facility in the financial and banking sector, according to a statement from the Abu Dhabi-based financial institution on Thursday.

“The AMF follows closely the developments of the Jordanian economy and the challenges it faces due to the current circumstances and works through a fruitful partnership with the Jordanian government to help the country contain different challenges in the most effective way,” the AMF said.

“In this respect, the AMF is studying another loan for the Hashemite Kingdom of Jordan to support the country’s financial position. The procedures for granting the loan will be completed shortly.”

The AMF also said it is currently studying financing requests from other member countries and is processing the requests through expeditious procedures, “so that the borrowing member countries can meet financing needs and enhance their financial positions to face various challenges, especially in such times".

The coronavirus pandemic has disrupted daily life,  forced countries into lockdowns, paralysed air travel, wiped at least $17 trillion off the value of the global stock markets and forced governments to introduce economic stimulus packages worth more than $8tn.

The global economy is set to contract 3 per cent this year as it slides into the deepest recession since the Great Depression of the 1930s, the International Monetary Fund said last month.

Jordan has also agreed on a $400m loan with the International Monetary Fund, Ziad Fariz, the governor of the Central Bank of Jordan, told Bloomberg earlier this month.

“The government will have to resort to borrowing and Jordan needs years to address the debt resulting from the crisis,” Mr Fariz said.

He forecast that the budget deficit will widen by 1bn Jordanian dinars (Dh5.18bn) in 2020, to 5 per cent of gross domestic product, due to declines in tourism revenues and exports during the health emergency.

The AMF was founded in 1976 to supports its member countries to implement various economic and financial reforms to boost growth. Its member countries include Jordan, the UAE, Bahrain, Saudi Arabia, Syria, Somalia, Iraq, Oman, Palestine, Kuwait, Lebanon, Libya and Egypt.

“The AMF is also keen to provide financial and technical support to its member countries during this period in particular, in light of the developments taking place due to the Covid-19, and the ensuing economic and financial repercussions in different aspects,” the AMF said.

The World Bank is also extending support to Middle East and North African countries as they battle the coronavirus pandemic.