Continuation
SUMMARY
Section
5 discusses the conduct of monetary policy operations in an Islamic banking
context.
The
operational framework of monetary policy is normally based on three different
channels.
These
channels are:
§ minimum
reserve system;
§ open
market operations;
§ and
standing facilities.
Each
of these channels deals with slightly different monetary policy objectives.
At
the same time, this always centered on interest rates.
Therefore,
there is a clear conflict between riba – the prohibition of interest payments and
the normal conduct of monetary policy.
From the research
paper of European Central Bank
(Authors:
F.Mauro, P.Caristi, S.Couderc, A.D.Maria,
L.Ho, B.K.Grewal, S.Masciantonio, S. Ongena and S.Zaher)
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