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What Is the Jordanian Dinar (JOD)?
Let me explain the Jordanian Dinar directly: it's the national currency of Jordan, abbreviated as JOD. You should know it breaks down into smaller units—one dinar equals 10 dirhams, 100 qirsh, or 1,000 fils. It's also in circulation in Israel's West Bank.
Key Takeaways
The Jordanian Dinar (JOD) has served as Jordan's national currency since 1950. It's pegged to the U.S. dollar at 0.709 per dollar, a setup that's been in place since 1995. This peg gives Jordan a stable currency system, which helps local banks draw in deposits. All issued dinars feature the official name, the Hashemite Kingdom of Jordan. The current banknotes come in 1, 5, 10, 20, and 50 dinar denominations.
Understanding the Jordanian Dinar (JOD)
The dinar became Jordan's official currency in July 1950, replacing the Palestinian pound that had been used in the British Mandate of Palestine and the Emirate of Transjordan since 1927. After gaining independence, Jordan set up the Jordan Currency Board to handle issuing and circulating the currency.
In 1959, the Central Bank of Jordan (CBJ) took over production and monetary policy. You'll see the Hashemite Kingdom of Jordan printed on the dinars. The fourth series of banknotes from the CBJ includes 1, 5, 10, 20, and 50 dinars. Coins were in Arabic until 1992, then switched to English. The peg to the U.S. dollar started in 1995.
Important Fact
Here's a key point: the Jordanian Dinar ranks as the fourth-highest valued currency worldwide.
Special Considerations
Jordan pegged its currency to the U.S. dollar to build stability in its financial system. If a currency fluctuates too much, it scares off foreign investment and causes capital to flee. By linking to the dollar, Jordan creates a stable regime that draws deposits to its banks and boosts foreign direct investment (FDI).
Jordan's GDP was $45 billion in 2021, projected to reach $47.5 billion in 2022. However, this peg means the central bank can't adjust the currency's value in response to economic shifts like recessions or rapid growth. Also, changes in the U.S. dollar's strength due to American conditions can affect the dinar's buying power, even if Jordan's economy is different.
JOD to USD Peg
The JOD is fixed to the USD at 1 USD = 0.709 JOD. For instance, if you're wiring $1,000 to Jordan, you'd get 709 dinars. This rate stays constant because it's pegged, unlike floating currencies that vary with market changes.
Is the Jordanian Dinar Strong?
Yes, the Jordanian Dinar is strong, mainly because of its peg to the U.S. dollar, not just the economy's strength.
Why Is the Jordanian Dinar So Expensive?
The dinar is expensive due to its peg to the USD. Jordan maintains fixed rates, so the currency doesn't fluctuate with supply and demand. The government enforces a tight monetary policy to control its value.
Why Is JOD Pegged Against the USD?
Jordan pegged to the USD for financial stability, just like other countries do. The USD is stable and widely used, with minimal wild swings. This peg stabilizes Jordan's currency and system, attracting investment that grows the economy and improves citizens' lives.
How Do You Calculate the JOD Exchange Rate?
You can figure out the JOD exchange rate to any currency using a converter like XE.com. The JOD to USD rate is fixed at 1 USD = 0.709 JOD.
The Bottom Line
The Jordanian Dinar is the currency of the Kingdom of Jordan, pegged to the USD since 1995 for a stable and strong value. This brings financial stability, but the economy remains stagnant, affected by regional terrorism and an inefficient public sector.
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