Jordanian Dinar (JOD)

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Jordanian Dinar (JOD)

Overview

The Jordanian dinar (JOD) is the official currency of the Hashemite Kingdom of Jordan and is also circulated in the West Bank. One dinar subdivides into 10 dirhams, 100 qirshes (piastres), or 1,000 fils. Banknotes currently issued by the Central Bank of Jordan are 1, 5, 10, 20, and 50 dinars. Coins and banknotes bear the country’s official name.

History and denominations

  • Introduced: July 1950, replacing the Palestinian pound.
  • Monetary authority: Jordan Currency Board initially; Central Bank of Jordan (CBJ) took over currency issuance and monetary policy in 1959.
  • Notes: Fourth series by the CBJ in circulation today.
  • Coins: Legends were in Arabic until 1992, then changed to include English.

Peg to the U.S. dollar

Jordan has pegged the dinar to the U.S. dollar since 1995. The official fixed rate is:
– 1 USD = 0.7090 JOD
Equivalently:
– 1 JOD ≈ 1.410 USD

Reasons for the peg

  • Stability: Pegging to the USD provides a predictable exchange-rate environment that helps attract foreign deposits and investment.
  • Confidence: A stable currency reduces exchange-rate risk for trade and cross-border capital flows.

Trade-offs and risks

  • Limited monetary flexibility: The CBJ cannot freely adjust the exchange rate to respond to local recessions or overheating.
  • External vulnerability: Movements in the U.S. dollar — driven by U.S. economic conditions — directly affect the real purchasing power of the dinar even if Jordan’s domestic economy is on a different trajectory.
  • Structural challenges: Jordan’s economy remains relatively small (GDP ≈ $45 billion in 2021, with forecasts around $47.5 billion for 2022) and faces structural constraints and regional instability that can limit growth despite currency stability.

Practical notes

  • Converting: Because the JOD–USD rate is fixed, conversion between those two currencies is stable; conversions with other currencies require current market rates or a currency converter.
  • Value rank: The dinar is among the highest-valued world currencies by unit price, largely due to the peg rather than relative domestic purchasing power.

Summary

The Jordanian dinar is a stable, high-value currency maintained by a long-standing peg to the U.S. dollar. The peg supports financial stability and investment but constrains Jordan’s ability to use exchange-rate policy and exposes the economy to changes in the dollar’s strength. Jordan’s broader economic performance continues to reflect structural and regional challenges.

Sources

Central Bank of Jordan; XE; Statista; UPI; FXSSI