MUSCAT – The structures of these instruments and their related contracts were approved after review by the Supreme Sharia Supervisory Board of the CBO, in accordance with regulatory requirements and Islamic Sharia principles. The first phase includes the launch of the Qard Hasan and Restricted Mudaraba instruments to inject liquidity in Omani riyals into the banking sector.

Under these instruments, the CBO extends liquidity to Islamic banks against Sharia-compliant securities as acceptable collateral. The Islamic banks then invest this liquidity in Sharia-compliant instruments, acting as speculators in line with Islamic finance principles.

The electronic platform also facilitates the issuance of government securities, including Islamic treasury bills and sukuk. Future stages will introduce instruments aimed at absorbing excess liquidity from the banking sector.

This system is the first of its kind in the Middle East and North Africa region, offering a diverse range of liquidity management tools that support both monetary and fiscal policies in full accordance with Islamic Sharia.

Integrated with national financial market infrastructures, the system connects to the Real-Time Gross Settlement System and the clearing system of the Muscat Clearing and Depository Company.

It is worth noting that the launch of this system complements CBO’s efforts to provide Sharia-compliant liquidity management tools to Islamic banking institutions in the Sultanate of Oman, which began with the launch of the US dollar-denominated money market instrument in December 2022.