IDEAS home Printed from https://ideas.repec.org/a/eme/imefpp/v1y2008i3p210-226.html
   My bibliography  Save this article

The Islamic inter bank money market and a dual banking system: the Malaysian experience

Author

Listed:
  • Obiyathulla Ismath Bacha

Abstract

Purpose - This paper seeks to examine the operation of an Islamic inter-bank money market (IIMM), within a dual banking system. Design/methodology/approach - The paper describes Malaysia's Islamic IIMM. It then examines some of the key risks associated with money market functions. An empirical examination of the extent to which yields in the IIMM are correlated with conventional money market yields is undertaken. The implication of this on interest-rate exposure for the Islamic financial sector is discussed. Finally, the paper looks at some of the challenges and offers conclusions. Findings - The paper argues that even though an Islamic money market operates in an interest-free environment and trades Originality/value - The paper offers insights into the IIMM, focusing on Malaysia.

Suggested Citation

  • Obiyathulla Ismath Bacha, 2008. "The Islamic inter bank money market and a dual banking system: the Malaysian experience," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing, vol. 1(3), pages 210-226, August.
  • Handle: RePEc:eme:imefpp:v:1:y:2008:i:3:p:210-226
    as

    Download full text from publisher

    File URL: http://www.emeraldinsight.com/10.1108/17538390810901140?utm_campaign=RePEc&WT.mc_id=RePEc
    Download Restriction: Access to full text is restricted to subscribers

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bacha, Obiyathulla I., 2004. "Dual Banking Systems and Interest Rate Risk for Islamic Banks," MPRA Paper 12763, University Library of Munich, Germany, revised Mar 2004.
    2. Kohn, Meir, 2003. "Financial Institutions and Markets," OUP Catalogue, Oxford University Press, edition 2, number 9780195134728.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. CHATTI, Mohamed Ali & KABLAN, Sandrine & YOUSFI, Ouidad, 2010. "Activity diversification and performance of Islamic banks in Malaysia," MPRA Paper 28348, University Library of Munich, Germany.
    2. Ndiaye, Ndeye Djiba & Masih, Mansur, 2017. "Is inflation targeting the proper monetary policy regime in a dual banking system? new evidence from ARDL bounds test," MPRA Paper 79420, University Library of Munich, Germany.
    3. Seho, Mirzet & Alaaabed, Alaa & Masih, Mansur, 2016. "Risk-Sharing Financing of Islamic Banks: Better Shielded Against Interest Rate Risk?," MPRA Paper 82558, University Library of Munich, Germany.
    4. 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.
    5. Kahf, Monzer & Hamadi, Cherin, 2014. "An Attempt to Develop Sharīʿah Compliant Liquidity Management Instruments for the Financier of Last Resort: With Reference to Qatar Development Plan," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 22, pages 109-138.
    6. Sarker, Md. Abdul Awwal, 2015. "Islamic Monetary Policy Instruments (IMPIs)," Working Papers 1436-4, The Islamic Research and Teaching Institute (IRTI).

    More about this item

    Keywords

    Banking; Islam; Money markets; Malaysia;

    JEL classification:

    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:imefpp:v:1:y:2008:i:3:p:210-226. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman). General contact details of provider: http://www.emeraldinsight.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.