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Monetary Management in an Islamic Economy الإدارة النقدية في اقتصاد إسلامي

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  • MOHSIN S. KHAN

    (International Monetary Fund, Washington, D.C.)

  • ABBAS MIRAKHOR

    (International Monetary Fund, Washington, D.C.)

Abstract

In an Islamic economic system financial and monetary relations have to be organized and conducted in a manner which precludes the use of interest in any form. Profit and profit-sharing being permitted, a wide range of contracts are available to entrepreneurs and financiers. There are other permitted transactions to cover situations where profit-sharing is not applicable. Currently we have two models of Islamic banking, the two tier Mudarabah model which endorses fractional reserve banking and the other which opts for 100% reserves against demand deposits. No reserves are required against investment deposits. It is desirable to develop instruments that can provide the investors with a sufficient degree of liquidity, security , and profitability. In a stock market operating in accordance with Islamic rules disposition of investable funds would be made on the basis of profit prospects of the enterprises. Monetary policy and central banking will seed to evolve financial institutions and instruments that facilitate efficient mobilization of savings and allocation of resources consistent with the objectives of Islamic economy. All conventional tools normally available in a modern economy will be at the disposal of Islamic monetary authorities with the exception of those involving the use of interest. يجب تنظيم العلاقات المالية والنقدية في الاقتصاد الإسلامي على نحو يستبعد الربا . ولقد سمحت إباحة الربح والمشاركة فيه بمدى واسع من العقود ، كما أن هنا صيغا أخرى في الحالات التي يتعذر فيها المشاركة في الربح . وفي الوقت الحاضر هناك نموذجان للعمل المصرفي الإسلامي : الأول نموذج المضاربة المزدوجة الذي يفترض احتفاظ المصارف باحتياطي قانوني جزئي ، والنموذج الآخر يتبنى الاحتفاظ باحتياطي نسبته 100% مقابل الودائع تحت الطلب ، ولا يلزم المصرف بالاحتفاظ بأي احتياطي مقابل الودائع الاستثمارية . ويجب تطوير أدوات مالية توفر للمستثمرين درجة كافية من السيولة والأمان والربحية . كما يجب تخصيص أموال الاستثمار في أسواق الأوراق المالية الإسلامية على أساس الربح المتوقع . وتهدف السياسة النقدية وأنشطة المصارف المركزية إلى تطوير المؤسسات والأدوات المالية التي تسهل كفاءة حشد المدخرات وتخصيص الموارد مع أهداف الاقتصاد الإسلامي . وجميع أدوات السياسة النقدية المعاصرة ستكون متاحة للسلطة النقدية الإسلامية عدا الأدوات الربوية .

Suggested Citation

  • Mohsin S. Khan & Abbas Mirakhor, 2002. "Monetary Management in an Islamic Economy الإدارة النقدية في اقتصاد إسلامي," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 14(1), pages 3-25, January.
    • Handle: RePEc:abd:kauiea:v:14:y:2002:i:1:no:5:p:3-25
    DOI: 10.4197/islec.14-1.5
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    Cited by:

    1. Shahzadah Nayyar Jehan, 2021. "Due Diligence and Risk Alleviation in Innovative Ventures—An Alternative Investment Model from Islamic Finance," JRFM, MDPI, vol. 14(6), pages 1-13, June.
    2. Uddin, Md Akther & Ali, Md Hakim & Radwan, Maha, 2019. "Can GDP Growth Linked Instrument Be Used For Islamic Monetary Policy?," MPRA Paper 102888, University Library of Munich, Germany.
    3. Hadian , Mehdi, 2017. "Islamic Finance and the Fluctuations of Investment and Output: The Role of Monetary Policy," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 12(3), pages 277-293, July.
    4. Mr. Alexei P Kireyev, 2001. "Financial Reforms in Sudan: Streamlining Bank Intermediation," IMF Working Papers 2001/053, International Monetary Fund.
    5. Abderraouf Ben Ahmed Mtiraoui, 2019. "Finance of Islamic Ethics, Conventional Finance and Economic Growth: Applying Dynamic Panel Data [Finance de l'éthique islamique, finance conventionnelle et croissance économique: Application de do," Post-Print hal-02495603, HAL.
    6. Hossain, Akhand Akhtar, 2014. "Empirical relationships among money, output and consumer prices in nine Muslim-majority countries," Journal of Asian Economics, Elsevier, vol. 31, pages 42-56.
    7. M. Ariff & A. Chazi & M. Safari & A. Zarei, 2017. "Significant Difference in the Yields of Sukuk Bonds versus Conventional Bonds," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 16(2), pages 115-135, August.
    8. Uddin, Md Akther & Halim, Asyraf, 2015. "Islamic monetary policy: Is there an alternative of interest rate?," MPRA Paper 67697, University Library of Munich, Germany, revised 07 Jun 2015.
    9. Mtiraoui, Abderraouf & Lassoued, Mongi & Hassen Khémiri, Hend, 2019. "Le développement de la finance islamique entre la tendance et la durabilité dans la région MENA : Application sur les données de panel [The Development of Islamic Finance Between Trend and stabilit," MPRA Paper 94804, University Library of Munich, Germany.
    10. Akhand Akhtar Hossain, 2009. "Central Banking and Monetary Policy in the Asia-Pacific," Books, Edward Elgar Publishing, number 12777.
    11. Al-Jarhi, Mabid, 2000. "السياسات النقدية في إطار إسلامي [Monetary Policy in an Islamic Framework]," MPRA Paper 67547, University Library of Munich, Germany, revised 2002.
    12. Amine Ben Amar, 2022. "On the role of Islamic banks in the monetary policy transmission in Saudi Arabia," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 12(1), pages 55-94, March.
    13. Uddin, Md Akther, 2014. "Can GDP growth rate be used as a benchmark instrument for Islamic monetary policy?," MPRA Paper 67696, University Library of Munich, Germany.
    14. Mumtaz Hussain & Asghar Shahmoradi & Rima Turk, 2016. "An Overview of Islamic Finance," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 7(01), pages 1-28, February.
    15. ALJARHI, Mabid, 2018. "The Islamic macroeconomic model: How to Apply it," MPRA Paper 103397, University Library of Munich, Germany, revised 01 Oct 2020.
    16. Mtiraoui, Abderraouf & GABSI, Feriel, 2018. "La finance entre l’éthique islamique, la réalité conventionnelle et croissance économique dans la région MENA [Finance Between Islamic Ethics, Conventional Reality and Economic Growth in the MENA R," MPRA Paper 88251, University Library of Munich, Germany.
    17. Hossain, Akhand Akhtar, 2016. "Inflationary shocks and real output growth in nine Muslim-majority countries: Implications for Islamic banking and finance," Journal of Asian Economics, Elsevier, vol. 45(C), pages 56-73.
    18. Hassan, M. Kabir & Aliyu, Sirajo, 2018. "A contemporary survey of islamic banking literature," Journal of Financial Stability, Elsevier, vol. 34(C), pages 12-43.
    19. Uddin, Md Akther, 2019. "Islamic Monetary Economics: Insights from the Literature," MPRA Paper 102887, University Library of Munich, Germany.
    20. Uddin, Md Akther, 2016. "Reemergence of Islamic Monetary Economics: A Review of Theory and Practice," MPRA Paper 72081, University Library of Munich, Germany.
    21. Khadidja Khaldi & Amina Hamdouni, 2018. "Islamic Financial Intermediation Compared to Ribaoui Financial Intermediation: A Theoretical and Mathematical Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 8(3), pages 268-283.

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