Islamic Money Markets And Their Role In Liquidity Management Of Islamic Financial Institutions: A Case Study In Malaysia Madani
Abstract
The rapid development of Islamic finance has brought forth a need for robust liquidity management tools that align with Shariah principles. Islamic money markets play a crucial role in addressing liquidity needs of Islamic Financial Institutions (IFIs), especially in times of economic instability. This paper explores the role of Islamic money markets in liquidity management within IFIs, with a specific focus on Malaysia, a global leader in Islamic finance. By examining the regulatory frameworks, financial instruments such as Sukuk and Islamic Treasury Bills, and the broader macroeconomic environment, this study investigates how these markets contribute to the goals of the Madani Malaysia initiative. This initiative aims to create a balanced, inclusive, and sustainable economic ecosystem. The findings highlight both the achievements and challenges of the Malaysian Islamic money markets, with suggestions for future improvements.
