3 research outputs found
The impact of interest rate changes on islamic home financing: Malaysia as a case study
No full textThis paper investigated the impact of interest rate changes, specifically the base lending rate (BLR) on the demand for Islamic home financing in a dual banking system. Malaysia is taken as a case study. Theoretically, any increase in the interest rate (base lending rate), would lead customers who are guided by the profit motive to substitute Islamic home financing for conventional bank home loans and vice versa. Using a 109 monthly data series covering ten years, the study found that an increase in the base lending rate would trigger customers to obtain financing from Islamic banks. Conversely, any decrease in the base lending rate would induce customers to shift to the conventional home loans. The paper concludes that because customers are profit motivated, Islamic banks in the dual banking system, such as in Malaysia are exposed to interest rate risks despite operating on an interest free principle
Measuring the Size of Output Gap in Sukuk Issuing OIC Member Countries
No full textThe aim of this study is to estimate the size of output gaps for sukuk issuing Organization of Islamic Cooperation (OIC) member countries. The output gap is measured based on univariate Hodrick-Prescott (HP) filter for the period 1980 until 2011. Data are sourced from the World Economic Outlook and SESRIC databases. The findings reveal that Bahrain, Pakistan and Malaysia have smooth trend between real GDP and its trends. Most countries display fewer fluctuations in business cycles and changes in inflation during mid-2000s. The results suggest that output gap estimations contain key information for monetary policy since the estimate of output gap can contribute towards identifying and assessing the effectiveness of monetary policy framework over time. For cross-border sukuk issuance, the ability to sustain economic growth in the long run without inducing inflation will boost investors ’ confidence
THEORETICAL CONSIDERATIONS OF OWNERSHIP THEORY WITHIN MUAMALAT FRAMEWORK
No full textThis article discusses the definition, types and categories of ownership within muamalat framework according to the different perspectives of Muslim jurists as found in the literature. This will enable Muslims to make better-informed decisions while undertaking current muamalat transactions. The applications of ownership theory in relation to current muamalat practices will also be addressed. This article concludes that the ownership theory within muamalat framework has solid ground. However, due to the changing global landscape, fresh ijtihads and innovative approaches in dealing with contemporary muamalat practices are needed
