Islamic Derivatives Increasingly Necessary, but Constraints Remain

By 18/06/2020

Fitch Ratings-Dubai/London-17 June 2020: Fitch Ratings says that the recent volatility in key Islamic finance markets caused by the coronavirus pandemic, oil price fall and cuts in central banks repo rates highlights the need to use effective sharia-compliant derivatives as hedging tools (tahawwut). However, derivatives markets remain underdeveloped in most countries where Islamic finance is prevalent.