The first Islamic repo product in the Gulf
Cooperation Council (GCC) area has been executed in Abu Dhabi,
providing the regions Islamic banks with a new tool to
manage short-term liquidity.
The National Bank of Abu Dhabi (NBAD) and the Abu
Dhabi Islamic Bank (ADIB) concluded a $20 million, one-week
master collateralised murabaha agreement
against Malaysian and Abu Dhabi government-related entity sukuk on August 3.
Islamic banks have a number of hurdles to accessing
short-term liquidity. Shariah requirements
keep them to a limited range of products and sectors, while
banks credit ratings are often low due to their political
risk and relative youth. This makes accessing the interbank
lending market difficult.