UAE to offer Islamic repo
23 June 2011 UAE
Image: Shutterstock
The United Arab Emirates Central Bank is now accepting Islamic certificates of deposit as collateral.
The new Islamic facility is designed to provide increased liquidity to the market and users will need to sign a 'collateralised murabahah facility agreement' A murabahah contract is a sale and deferred payment trnasaction where the cost and profit margin are agreed in advance - it removes the requirement for interest charges, which are not permitted under Shariah law.
The new Islamic facility is designed to provide increased liquidity to the market and users will need to sign a 'collateralised murabahah facility agreement' A murabahah contract is a sale and deferred payment trnasaction where the cost and profit margin are agreed in advance - it removes the requirement for interest charges, which are not permitted under Shariah law.
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