What Is Islamic Money Market

The role of the islamic money market is to provide islamic nancial institutions ifis with facilities for adjusting portfolios over the short term the islamic money market in malaysia.

What is islamic money market. Islamic and conventional money markets can be assumed to offer similar. Islamic money market conducts a similar function of meeting the short term liquidity needs. The islamic money market fulfills three important functions and enables market players to perform similar functions to those of the conventional market but with the exception that the instruments used to perform these functions must be based on the shariah laws and principles. You will learn about the different instruments and components of an islamic money market.

The objective of the fund is to provide investors with a regular income. We will also discuss the role of money markets and the need for shari ah compliant sources of funds. The money market capital market derivative market commodity market and foreign exchange market together constitute the country s financial market. Beside the main function of channelling surplus units to deficit units islamic money market plays also the role of.

Issued by bay bithaman ajil. The money market is an essential and integral component of the financial system. The first islamic money market fund in pakistan. 5 calculate the price or proceeds of islamic money market instruments.

Instead of interest it allows islamic banks to share surplus capital on profit sharing basis. This islamic finance and capital markets course gives an overview of the tradability of sukuk also known as islamic bonds and the development of islamic money markets. The market facilitates banks with deficit in cash to borrow from the banks having surplus money. Liquidity management facilitate secondary trading of islamic mm instruments channel for central bank to conduct their monetary policy functions of islamic money market 1 8.

The islamic money market is integral to the functioning of the islamic banking system firstly in providing the islamic financial institutions with the facility for funding and adjusting portfolios over the short term and secondly serving as a channel for the transmission of monetary policy. The issuer has the obligation to pay the bearer the amount deposited together with profit at a specified future date.