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The Uses and Misuses of Commodity Murabaha: Islamic Economic Perspective

Author

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  • Alsayyed, Nidal

Abstract

Some exciting Economical developments have taken place in the area of Islamic finance during the preceding two years. There has been a fast expansion in its market share, diversification of products picked up pace and the rapid globalization of the services ensures their future expansion. Commodity murabahah is one of the most commonly used financing contracts in Islamic banking. But of no less consequence may prove, the lurch one finds commodity murabahah in at the close of 2008 (Hasan 2009) . Commodity Murabaha is clearly the Islamic treasurer’s funding product of choice, as it is flexible enough to facilitate many structures for financing, hedging, and currency exchanging. It is time to apply the shari'ah objective of “sa’dd-aldharai” that closes the potential avenues for outwitting the shari’ah objectives and spirit .

Suggested Citation

  • Alsayyed, Nidal, 2010. "The Uses and Misuses of Commodity Murabaha: Islamic Economic Perspective," MPRA Paper 20262, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:20262
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    File URL: https://mpra.ub.uni-muenchen.de/20262/1/MPRA_paper_20262.pdf
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    Citations

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    Cited by:

    1. Wesal M. Aldarabseh, 2019. "The Interest in Islamic Finance Contracts in Saudi Arabia as Viewed by Google Trends," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 11(9), pages 1-12, September.
    2. Ismail, Abdul Ghafar & Nik Abdul Ghani, Nik Abdul Rahim & Mat Zain, Mat Nor, 2014. "Tawarruq Time Deposit With Wakalah Principle: An opinion That Triggers New Issues," Working Papers 1435-2, The Islamic Research and Teaching Institute (IRTI).

    More about this item

    Keywords

    Islamic Economics; commodity murabahah; Time share in price; Shari’ah objectives; Bai al Inah; Commodity Murabahah House (Suq Al-Sila); Commodity Murabahah Program (CMP) ; deferred contracts; GCC; IIMM ; Islamic Banking Scheme (IBS ); “sa’dd-aldharai”;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly

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