For the second time this year, the Central Bank of Jordan has lowered its benchmark interest rates by 0.25 per cent.

The rediscount interest rate (at which lenders can borrow from the central bank) dropped to 4.50 percent, the rate on overnight repurchase agreements (which allows bankers or dealers to sell and buy back securities) to 4.25 percent, the rate on repurchase agreements for one week or more to 3.75 percent and on overnight window deposits (at which institutions can borrow from the central bank) to 3.50 percent.

The move, which will result in lower borrowing costs for lenders and companies, aims to attract more investments into the country, which has seen its public debt grow as tensions in the region continue to impact its economy. In 2012, Jordan registered a deficit of just above 8 per cent.

Lower interest rates could raise demand for domestic products, but can also lead to currency depreciation. Inflation in Jordan has risen sharply over the years, reaching 6.5 per cent in the first half of 2013, before easing slightly to 6.1 per cent in September, compared with the same period last year.