Total deposits, which include public funds, rose by 11 percent in March to 20.771 billion dinars ($29.3 billion) against the same period in 2009, Central Bank of Jordan (CBJ) data obtained by Reuters showed.

Bankers say the CBJ policy to allow a wider interest rate differential against the dollar in favor of the dinar had encouraged banks and depositors to keep their funds in dinar-denominated assets.

A main plank of monetary policy is the defense of the dinar, which is pegged to the dollar, a policy that the International Monetary Fund (IMF) says has served the Jordanian economy well.

Even Jordanian expatriates whose earnings were in foreign currencies were switching part of their savings into the dinar, attracted by interest as high as four percent, bankers say.

But deposit growth has eased substantially since the end of last year, a trend analysts attribute to a delayed reaction to the global recession last year which continues to hurt domestic demand, exports, tourism, worker remittances and foreign investments.

This is reflected in private sector deposits, mostly dinar-denominated assets that exclude public funds, which rose a marginal 1.7 percent since end-December 2009 when they stood at 16.257 billion dinars.

Total deposits, including government funds, rose 2.3 percent from 20.298 billion dinars at the end of last year, the data showed.

Last year, deposit growth was relatively resilient at 13.7 percent. In contrast, loans grew just 1.5 percent, after surging 14.2 percent in 2008.

Loan growth outpaced deposit growth during a boom period of accelerated economic growth that saw rapid credit expansion when the country's free market reforms attracted billions of dollars of investments by both local and foreign investors, bankers say.