Jordanian Dinar – Currency Overview

• ISO Code: JOD
• Symbol: JD
• Subunit: 1/100 piastre
• Inflation: 6.2%
• Nickname: Jod

Historical Overview

The first coins issued in Jordan were issued by the Nabataean King Aretas II (87-62) from his capital of Petra, whose treasury is now one of the seven new world wonders. In 64 BC Northern Jordan fell under Roman rule and the Nabataean kingdom was annexed in 106 AD. The treasury then started to produce denarii and Syrian tetradrachms which were in circulation in Jordan until the fall of the Roman empire, after which they were replaced by Byzantine coins. In 661 Jordan fell under Islamic rule and in the 680s Islamic coins began to circulate throughout Jordan as legal tender. Coins from Egypt, Syria and Iraq were in wide circulation in Jordan until the beginning of the British occupation it in 1918.

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In 1921 Jordan became the Emirate of Transjordan and then the Kingdom of Transjordan in 1946. The British mandate, however, didn't end 1948 when Jordan was declared an independent country. At the time the legal tender in use was the Palestinian Pound (PSP) created under the British mandate in Palestine in 1927.

Following Israel's creation of its own currency, the Palestine Currency Board became the Jordan Currency Board and the Palestinian Pound was replaced by the Jordanian Dinar in 1950 at par. At the conception of its currency Jordan joined the sterling area, only to leave it in 1972. In 1965, The Jordanian Central Bank was founded and became the sole currency issuing authority in Jordan. Until 1993 the Jordanian Dinar was divisible into 10 Dirhams or 1000 Fils, and from then on it has been divisible into 100 Piastres.

Current Global Status

The Jordanian dinar is a relatively strong and stable currency, perhaps due to its almost constant peg to the US dollar. Due to this fact It presents little interest for foreign exchange speculators, since as its fluctuations match those of the USD. Seeing as this is considered an "exotic" currency, meaning that it's not one of the major popular currencies in the foreign exchange market, it is usually bought and sold at rather large spreads by foreign exchange brokers, and is therefore rarely invested in on speculation.

Against the USD

The dinar's exchange rate with US dollar had been nearly constant since 1991. Since this year the central Jordanian bank has adopted narrower margins (0.708-0.710 Jordanian dinars = US$1), rather than the wider margins that were adopted initially in 1971, when the Jordanian dinar was first pegged to the US dollar. Jordanian Central bank reports confirm that the exchange rate is in fact pegged to the US dollar. The Central Bank buys USDs at 0.708 dinar, and sells USDs at 0.710 dinar.

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