Short-term liquidity sukuk
Short-term, tradable sukuk that Islamic banks hold as liquid assets and use to manage cash, including across borders.
Liquidity sukuk are short-term sukuk designed to be held and traded by Islamic financial institutions to manage their liquidity. The International Islamic Liquidity Management Corporation, established by central banks and multilateral organisations, issues short-term sukuk for cross-border use, and several central banks issue their own. They help Islamic banks meet liquidity requirements without holding interest-bearing government bills.
This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.
Related terms
SukukCertificates of equal value representing undivided shares in the ownership of assets, usufruct, services or a project.Collateralised murabahahA murabaha placement secured by collateral such as sukuk, used as an Islamic alternative to a repo.Commodity murabahaInterbank and treasury deals in which commodities are bought and sold on deferred payment to place or raise short-term funds.