The United Arab Emirates central bank will issue its first Murabahah-based Islamic certificate of deposit this year, providing banks with more investment options, said the chief executive officer of Standard Chartered Saadiq.
The debt market needs short-term notes to help “increase the liquidity pool” for Islamic banks, Afaq Khan said today at an Islamic banking conference in Abu Dhabi. Standard Chartered sits on the U.A.E. central bank’s Islamic liquidity management committee, he said.
Short-term liquidity management at Islamic banks and other financial institutions is a challenge, central bank Governor Sultan bin Nasser al-Suwaidi said at an Islamic banking conference in Singapore in June. Banks that adhere to Shariah principles “are facing a maturity mismatch,” said Ahmed Talhaoui, Abu Dhabi-based head of investment at Royal Capital, in an interview that month.
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