What Is the Jordanian Dinar (JOD)?

The Jordanian dinar, represented by the symbol JOD, is the official currency of Jordan. It is divided into smaller units: 10 dirhams, 100 qirshes, and 1,000 fils make up one dinar. Interestingly, the dinar is also in circulation in Israel’s West Bank.

### Key Takeaways
– The Jordanian dinar (JOD) has been the national currency of Jordan since 1950.
– The dinar is pegged to the U.S. dollar at a rate of 0.7090 per one dollar since 1995.
– By pegging the dinar to the dollar, Jordan benefits from a stable currency regime, attracting deposits to local banks.
– Issued dinars bear the official name of the country, the Hashemite Kingdom of Jordan.
– The current series of banknotes come in denominations of 1, 5, 10, 20, and 50 dinars.

Understanding the Jordanian Dinar (JOD)

To delve deeper into the Jordanian dinar, it officially became Jordan’s currency in July 1950, replacing the Palestinian pound. The Jordan Currency Board was established post-independence to regulate currency issuance. Notably, the dinar is regarded as the fourth-highest valued currency globally.

Taking over in 1959, the Central Bank of Jordan manages production and monetary policies. The current banknotes of the fourth series are denominated in 1, 5, 10, 20, and 50 dinars. The dinar, pegged to the U.S. dollar since 1995, also transitioned its coin denominations to English in 1992.

Special Considerations

Jordan’s decision to peg its currency to the U.S. dollar was to instill financial stability within its economy. This peg ensures stability, making local banks more attractive for deposits and encouraging foreign direct investments.

The stable currency regime also accounts for increased foreign direct investment in Jordan. However, this peg limits the central bank’s ability to adjust the currency’s value in response to economic changes like recessions or rapid growth periods.

### $45 Billion
Jordan’s GDP in 2021, projected to rise to $47.5 billion in 2022.

Any fluctuation in the U.S. dollar’s strength due to American economic conditions directly impacts the dinar’s purchasing power, irrespective of Jordan’s economic situation.

JOD to USD Peg

The Jordanian dinar is fixed at an exchange rate of 1 USD equal to 0.7090 JODs. This peg ensures exchange rate stability over time, unlike freely floating currencies that fluctuate based on market demand.

Is the Jordanian Dinar Strong?

Yes, the Jordanian dinar is a strong currency due to its peg with the U.S. dollar, ensuring stability.

Why Is the Jordanian Dinar So Expensive?

The Jordanian dinar’s expense lies in its fixed peg to the USD, as it maintains a steady value unaffected by supply and demand shifts. Tight monetary policies by the government also play a role in preserving its value.

Why Is JOD Pegged Against the USD?

Jordan’s decision to peg its currency to the USD is driven by the need for financial stability. With the USD being a widely stable currency, this peg ensures a steady financial system, attracting investments that ultimately enhance economic growth.

How Do You Calculate the JOD Exchange Rate?

You can determine the JOD exchange rate using tools like XE.com. The fixed exchange rate of 1 USD to 0.709 JODs remains constant over time.

The Bottom Line

The Jordanian dinar, pegged to the USD since 1995, maintains a stable and resilient position in the financial market. This peg has ensured financial stability, yet challenges persist in Jordan’s economy due to regional terrorism and inefficiencies in the public sector.