In the article Central bank cuts interest rates on loans to the industry, the author talks about how the central bank in Jordan cut the interest rates on medium-term loans for the industrial sector for one year. The cuts will decrease the rates to the interest rate the rediscount rate on the day a loan is extended minus a 2 per cent margin.
This is significant because decreasing the interest rate on loans gives businesses more incentive to use money towards investment in their companies. GDP= C+I+G+X-M. I will increase due to this rate decrease and such GDP will increase. Last year, the government did something similar to this and GDP increased by 22.4%.
In such a small and relatively poor country, this boost may be exactly what Jordan needs in order to become a stronger economic power in the world today.
