The Central Bank of the Republic of Turkey (CBRT) has increased its benchmark one-week repo rate to 15% from 10.25% on the 19th of November 2020, in a bid to tighten its monetary policy to ensure price stability, according to local media reports. The 475-basis points hike was reported to be the sharpest increase in two years. The CBRT raised the November benchmark one-week repo rate from 10.25%, which had stood since September 2020. Prior to this, the rate was held at 8.25% from May to August 2020, following gradual rate cuts from 11.25% in January 2020, according to the CRBT. &nbs...

Moroccan Association of Exporters, ASMEX, has signed an agreement with the Centre for Standardisation and Certification of the Spiritual Administration of Muslims of the Russian Federation and the Eurasian Development Fund in order to sell Moroccan Halal products in Russia, according to media reports.  The agreement, which was signed on the 13th of November 2020, is driven by emerging opportunities in the wake of the COVID-19 pandemic, according to ASMEX President, Hassan Sentissi. The signed agreement is aimed at developing long-term partnerships to develop the Halal industry...

In a statement released on the 17th of November 2020, Fitch Solutions (Fitch) lowered its 2020 real gross domestic product (GDP) estimate for Malaysia to -5.0% YoY (from -4.5% YoY, previously), as the third-wave of COVID-19 infections posed challenges to the country’s on-going economic recovery.  According to Fitch, domestic demand is anticipated to remain subdued through the remainder of 2020, driven by improving exports to recovering economies, off-setting weaker imports year-after-year.  In response to...

Bank Indonesia (BI) lowered its 7-day reverse repurchase rate to 3.75%, down 25 basis points, taking the interest rate down to its lowest level since the BI started using the instrument as a benchmark in 2016.  The rate cut came as a response to support the COVID-19-stricken economy, which is now facing its first recession in over 20 years. BI Governor, Perry Warjiyo, stated that the interest rate cut signalled the loose monetary stance being followed at BI. In addition, the large liquidity expansion also indicated the&n...

Dubai Aerospace Enterprise (DAE), a global aircraft leasing company with headquarters in Dubai, United Arab Emirates, has hired banks to arrange investor calls for a planned issuance of USD-denominated Sukuk, according to a document from one of the banks arranging the deal.  An issuance of 5-1/4-year senior unsecured Sukuk is expected to follow, subject to market conditions, according to the document. DAE, which is owned by Investment Corporation of Dubai, has hired Bank ABC, Commercial Bank of Dubai, Credit Agricole, Deutsche Bank, Dubai Islamic Bank, Emirates...

Malaysian Rating Corporation (MARC) has downgraded MEX II’s MYR 1.3 billion Sukuk Murabahah Programme (Sukuk Murabahah) rating to BBB-IS from AIS, and its MYR 150 million Junior Bonds to BB from BBB, while maintaining the rating placement on MARCWatch Negative.  MEX II is owned by Maju Holdings and provides infrastructure construction services in Malaysia. According to MARC, MEX II has a toll concession agreement with the Government of Malaysia to design, construct, operate and maintain a 16.8 km Lebuhraya Putrajaya-Kuala Lumpur In...

Malaysian-based oil, gas and petrochemical technical service provider, Dialog Group Berhad (Dialog) has successfully completed the issuance of MYR 500 million in nominal value of perpetual Sukuk Wakalah on the 16th of November 2020, according to a Bursa Malaysia announcement.  The Sukuk is the first issuance under Dialog’s Islamic notes issuance programme of up to a combined amount of MYR 3 billion based on the Shariah principle of Wakalah Bi Al-Istithmar (Sukuk Programme), which was lodged with the Securities C...

Moody’s Investors Service (Moody’s) has stated that the Government of Oman’s recently announced Sukuk issuance for retail investors is credit positive for the sultanates’ Islamic banks and Islamic banking windows of conventional banks, according to a sector comment report, as reported by local media.  Oman’s Ministry of Finance announced an OMR 25 Million Sukuk issuance on the 10th of November 2020, which is the first issuance available to retail investors. The public offering, which is Series 5 of the OMR Sovereign Sukuk Progr...

The Bangko Sentral ng Pilipinas (BSP) has issued draft guidelines pertaining to liquidity risk management of Islamic banks and Islamic banking units (IBUs). The main feature is that the BSP expects Shariah-compliant banks and IBUs that are a part of conventional banking systems to have their assets and liabilities segregated from the conventional parent, in addition to having separate liquidity management strategies. The BSP prefers that Islamic banks and IBUs apply Shariah-compliant instruments in the application of liquidity risk management, rather than assuming them...

Fitch Ratings (Fitch) notes that Islamic banks and conventional banks are exposed to similar uncertainties from the impending transition away from legacy interbank offered rates (IBOR), with regards to increased exposure to profit-rate, operational and legal risks, as well as lack of clarity on derivatives hedging and accounting. However, Shariah-compliance implications pose additional complexities for Islamic banks.    According to Fitch, the changeover to IBOR’s based on overnight risk-free rates (RFR) could affect Islamic banks’ Viability Ratings, (resultin...