Diversification of Islamic Financial Instruments
20
Table 9: Treasury Products
Product/Process Middle East North Africa Malaysia Indonesia
Forex Standard
requirements.
Forward deals
are not allowed
Standard
requirements.
Forward deals
are not allowed
Standard
requirements.
Forward deals
are not allowed
Standard
requirements.
Forward deals
are not allowed
Money Market Money market is
active but
products are less
complex due to
strict rules
imposed by the
Sharia scholars
Money market is
active but
products are less
complex due to
strict rules
imposed by the
Sharia scholars
Money market is
very active and
many unique
products based
on Mudharabah,
Commodity
Mudharabah and
other structures
are offered by
central banks and
government
agencies
Standard
requirements,
very basic
instruments
based on
Mudharabah are
offered.
Commodity
Mudharabah is
yet to be offered
in the market
Securities Government
papers and
Sukuk offered by
government and
large companies
are the typical
securities traded
Government
papers and
Sukuk offered by
government and
large companies
are the typical
securities traded
Active market
Active repo
market as well
Only government
papers are
traded. Very
limited Sukuk
and other
instruments
Derivatives Very limited
derivatives
products due to
strict ruling by
Sharia scholars
Not Yet Available More advanced
than Middle East
and Africa. Profit
and Currency
swap derivatives
have been seen in
the market
No derivative-
based product in
the market
Front Office Standard front-
office
functionalities to
facilitate dealers
in their trading
daily, with good
support for all
instruments
available in the
market
Standard front-
office
functionalities to
facilitate dealers
in their trading
daily, with good
support for all
instruments
available in the
market
Same as ME and
Africa
Same as ME and
Africa
Middle Office Standard middle
office
functionalities to
ensure dealing
risks are
minimized and
Standard middle
office
functionalities to
ensure dealing
risks are
minimized and
Same as ME and
Africa
Same as ME and
Africa