Jordan is an Arab nation situated on the banks of the Jordan River, and is home to the famous archaeological site known as Petra. The currency of Jordan is the Jordanian dinar. The official code used to refer to the Jordanian dinar is JOD, while the unofficial code is JD. Furthermore, its sign is دينار. Its minor units are: 1/1000 fils, 1/100 qirsh, and 1/10 dirham. The inflation rate is -0.80. It is important to note that the Central Bank of Jordan is responsible for the dinar's issuance and injection into the economy. The major foreign exchange in Jordan takes place between the dinar and euro currencies.
History of the Jordanian Dinar
Between the year 1927 and 1950, Jordan used the Palestine pound as its currency. When Jordan gained its independence in 1946, its was believed that the country should have its own national currency. This ultimately resulted in the passing of Provisional Act No. 35 of 1949, which paved the way for the creation of the Jordan Currency Board in 1949. Composed of four members and a president, the board was granted the sole responsibility of issuing the new Jordanian currency. The Jordanian dinar became Jordan’s official currency in 1950.
The government first introduced coins in 1949. They were circulated in denominations of 100, 50, 20, 10, 5, 1 fils. Other coins were issued later, such as the 20 fils in 1965, 25 fils in 1968, ¼ dinar in 1970, 1 fils in 1985, and smaller ¼, ½, and 1 dinar coins in 1996. 1 fils coin was last minted in 1985. The fils, qirsh and dirham coins were denominated using Arabic text until 1992. The coins were struck in brass, nickel, copper, aluminum, bronze, and cupronickel. Currently, the most frequently used coins are 50, 25, 10, 5, 2, and 1 fils.
The government of Jordan began issuing banknotes in 1949. The first denominations to be minted were 50, 10, 5, 1, ½ dinars. In 1959, the Central Bank of Jordan took over notes production from the Jordan Currency Board. The Central Bank introduced 20 and 50 dinar notes in 1977 and 1999, respectively. It replaced the ½ dinar notes with coins in 1999. The most frequently used Jordanian dinar bank notes are in denominations of 50, 20, 10, 5, and 1 dinar. The notes have been made of attractive colors such are blue, orange-brown, and light green among other colors.
Fixed Exchange Rates
Jordanian dinar has been fixed to the IMF’s special drawing rights (SDR) since 1995. Its current fixed price against the dollar is 1 US dollar equals 0.709 dinar. This is the same as having 1 dinar equalling to 1.41044 dollars. Pegging the dinar to the dollar has been advantageous to Jordan, since it helps shield the value of the dinar from depreciation in spite of turbulent economic times such as high interest rates. In spite of this, the Jordan economy still suffers from high dependency on aid, high unemployment rates, and pressure on its natural resources.