This will be a repurchase agreement which will enable financial institutions, both conventional and Islamic, to access short term liquidity against Government of Bahrain Ijara sukuk issued by the CBB. We have also encouraged the IIFM to develop contracts and documents that can be used for conducting transactions through commodity murabahas.
Even so, there is a continuing need for more depth and liquidity in Sharia-compliant money markets and the CBB intends to remain at the forefront of such initiatives. The final challenge is to ensure that the industry’s undoubted success does not turn into complacency.