Interest Rate Monitor

March 31st 2009

2

Internationally

3

Recap of the Week:

Wall Street: A Critical Crossroad

4

Recap of the Week:Economy: Worst in 26 years

The US government confirmed Thursday that the U.S. economy suffered its largest drop in 26 years during the fourth quarter.The nation's gross domestic product, the broadest measure of economic activity, fell at an annual rate of 6.3% during the final three months of 2008. That's slightly worse than the government's previous estimate of a 6.2% drop in the period.

Economists surveyed by Briefing. COM had forecast that GDP would fall at a 6.6% rate in the latest reading.The drop is the biggest one-quarter decline in this key measure since the first three months of 1982.

5

Recap of the Week:Other Markets

Crude Oil: Oil fell nearly $2 Friday as weaker stock markets, soft economic data and evidence of OPEC overproduction encouraged profit-taking after several days of gains.

U.S. crude traded down $1.96 to settle at $52.38 a barrel, pulling back from Thursday's four-month high. London Brent crude fell $1.48 to $51.98.

The pullback came as U.S. and European stock markets dipped on continued concern over the global economy.

Treasuries: Treasury prices fell, raising the yield on the benchmark 10-year note to 2.76% from 2.73% Thursday. Treasury prices and yields move in opposite directions.Lending rates declined. The 3-month Libor rate fell to 1.22% from 1.23% Thursday, according to Bloomberg.com. The overnight Libor rate fell to 0.28% from 0.29%. Libor is a bank-to-bank lending rate.

6

Next Week:Economic Calendar 30 March-3 April 09

DateGMTCCYEventCons.Prev.

30/3/0909:00 EUR Euro-Zone Economic Confidence (MAR)

65.8 65.4

30/3/0909:00 EUR Euro-Zone Business Climate Indicator (MAR)

-3.30 -3.51

30/3/0914:30 USD Dallas Fed Manufacturing Activity (MAR)

---57.3%

31/3/0909:00 EUR Euro-Zone CPI Estimate (YoY) (MAR) 0.9% 1.2%

31/3/0913:00 USD S&P/Case-Shiller Home Price Index (JAN)

--150.66

31/3/0913:45 USD Chicago Purchasing Manager (MAR) 34.7 34.2

31/3/0914:00 USD Consumer Confidence (MAR) 28 25

1/4/09--USDTotal Vehicle Sales (MAR)9.3M

9.1M

1/4/0908:00 EUR Euro-Zone Purchasing Manager Index Manufacturing (MAR F)

34 34

1/4/0909:00 EUR Euro-Zone Unemployment Rate (FEB)

8.3% 8.2%

1/4/0912:15 USD ADP Employment Change (MAR) -650

K

-697K

1/4/0914:00 USD ISM Manufacturing (MAR) 35.8 35.8

1/4/0914:00 USD ISM Prices Paid (MAR) 32.5 29.0

7

Economic Calendar (continued)

DateGMTCCYEventCons.Prev.

1/4/0914:00 USD Pending Home Sales (MoM) (FEB) -2.0% -7.7%

1/4/0914:00 USD Construction Spending (MoM) (FEB) -1.7% -3.3%

2/4/09--ALLGroup of 20 (G 20) Summit In London-- --

2/4/0911:45 EUR European Central Bank Rate Decision 1.00% 1.50%

2/4/0912:30 USD Initial Jobless Claims (MAR 28) --652K

2/4/0914:00 USD Factory Orders (FEB) -1.2% -1.9%

3/4/0908:00 EUR Euro-Zone Purchasing Manager Index Composite (MAR F)

37.6 37.6

3/4/0912:30 USD Change in Non-farm Payrolls (MAR) -660K -651K

3/4/0912:30 USD Unemployment Rate (MAR) 8.5% 8.1%

3/4/0914:00 USD ISM Non-Manufacturing Composite (MAR)

42.0 41.6

3/4/0916:00 USD Bernanke Speaks at Fed Credit-Markets Conference in Charlotte

-- --

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Fed Fund 30 Day Product

ProductRates 22/3Rates 30/3

FFH9 Mar 090.1975%0.1825%

FFJ9 Apr 090.22%0.215%

FFK9 May 090.25%0.225%

FFM9 June 090.235%0.24%

FFN9 July 090.255%0.27%

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US Treasury Yield Curve

TenureYield10/3/09

Yield23/3/09

Yield30/3/09

1 M0.11660.07100.0051

3 M0.23830.22320.1217

6 M0.45220.37580.3758

2Y0.98320.88720.8750

5Y1.92291.67131.7500

10Y2.91022.65242.7081

30Y3.61583.65443.5725

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LIBOR Rates..

TenureUSD

10/3/2009USD

23/3/2009USD

30/3/2009

O/N0.328750.281250.27875

1-wk0.402500.398750.46063

1-mth0.564380.521880.51813

3-mth1.312501.222811.22000

6-mth1.916251.751251.76250

12-mth2.236252.013752.01000

0.00%0.25%

0.50%0.75%

1.00%1.25%

1.50%1.75%

2.00%2.25%

2.50%

O/N 1W 1M 3M 6M 12

M

10-Mar-09 30-Mar-09 23-Mar-09

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Locally

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Local News:

the value of national exports rise by 16.9% The statistical data issued by the Department of Statistics indicate a rise in the value of national exports by 16.9 % and the re-exports by 3.5 % during January 2009 compared with the same period of 2008. In contrast, the value of imports has

decreased by 15 % during January 2009.

The deficit in the trade balance, which is calculated by deducting the value of imports from the value of total exports, has risen by 33.2 % during January 2009 as compared to the same period of 2008, therefore the imports coverage by the exports stood at 52.2 %, meanwhile the imports coverage by the exports was 39.1 % for the same month of the previous year which means an increase by 13.1%.

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Local News:

Credit facilities declined by 1.9% • Credit facilities extended by licensed banks in Jordan declined by 1.9

% to JD12.9 billion at the end of February 2009 from JD13.2 billion at the end of 2008.

• According to Central Bank of Jordan (CBJ) figures, credit facilities to individuals dropped by JD307.9 million to JD3.9 billion compared with JD4.2 billion in 2008.

• The drop in retail credit facilities accounted for 120 % of the total decline in credit facilities, the CBJ report indicated.

• Another sector affected by the fall in credit facilities was general trade which regressed by JD19 million from JD2.91 billion in 2008 to JD2.89 billion until the end of February of this year.

• However, facilities to the construction and industry sectors increased by JD71.8 million and JD26.6 million to JD2.34 billion and JD1.62 billion respectively compared with JD2.27 billion and JD1.59 billion in 2008

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Interest Rate WatchExcess Liquidity & Government Issues

• As of March 30 2009 , the volume of excess reserves, including the overnight window deposits held at the CBJ JD(2,495.4 ) million.

Latest 3 yr TBond

Issue DateMaturity Date

Size of the Issue

Unified Coupon

T20915/1/200915/1/2012JD 50 mio6.747%

T30922/1/200922/1/2012JD 50 mio6.588%

T40929/1/200929/1/2012JD 50 mio6.361%

T50926/3/200926/3/2012JD 100 mio5.270%

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Interest Rate WatchCorporate CDs

3M6M12M15M

JOD6.375%6.625%N.A7.00%

USD1.25%.N.AN.A.N.A.

Union Bank

Capital Bank

3M6M12M

USD2.25%2.75%3.5%

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Prime Lending Rates..

BankRateBankRate

ARBK8.50%THBK8.50%

AJIB7.75%HSBC8.50%

BOJK8.75%JIFB8.50%

JOCB8.75%JOKB8.80%

CABK8.75%JONB8.50%

EFBK8.50%Arab Land8.50%

Audi8.50%Union Bank9.00%

NBK8.50%BLOM8.75%

17

Prime Lending Rates..

77.27.47.67.8

88.28.48.68.8

9A

JIB

NB

K

TH

BK

Au

di

JIF

B

AR

BK

HS

BC

EF

BK

Ara

bL

an

d

JO

NB

JO

GB

BL

OM

CA

BK

JO

KB

US

AV

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Chart of the Week

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The Thin Line Between Inflation & Deflation

6065707580859095

100105110115120125130135140145150

Jan-08

Feb

-08

Mar-08

Ap

r-08

May-08

Jun

-08

Jul-08

Au

g-08

Sep

-08

Oct-08

No

v-08

Dec-08

Jan-09

Feb

-09

CPI

Accumulated inflation in Jordan witnessed growth of 4.5% in the first two months of 2009, compared with the same period of 2008.However, comparing the results on a monthly basis, we can notice the steep downward trend of the CPI between January 2009 and Dec 2008.The Healthy Rate of Inflation in Jordan is 2-

6%.

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Disclaimer• THIS REPORT DOES NOT CONSTITUTE ANY

RECOMMENDATION TO BUY, SELL OR HOLD ANY SECURITY.

• CAIRO AMMAN BANK HAS PREPARED THIS REPORT FROM SOURCES THOUGHT TO BE RELIABLE, THEREFORE; CAIRO AMMAN BANK DOES NOT HOLD ANY RESPONSIBILITY TO THE INFORMATION ENCLOSED HEREIN NOR TO THE DECISIONS BASED UPON.