Bankers from six Islamic countries, who have been meeting in the Malaysian tax haven island of Labuan, have agreed to launch by the end of next year a global Islamic inter-bank money market.
Currently, there are no money markets compatible with Shari’ah, severely restricting the activities of Islamic banks or banks which offer Islamic financial facilities alongside their conventional products.
Under Shari’ah or Islamic laws, a money market cannot trade or discount debt and interest.
According to the Reuters news agency, the prospective Islamic money market, which will be based on U.S. dollars, is expected to mobilize at least $150 billion and would have 24-hour liquidity and market management centers.
The bankers also plan to create an Islamic Ratings Agency, which will be based in Bahrain. It will assign ratings to Islamic papers along with other conventional ratings agencies. — (Albawaba-MEBG)