SBP launches shariah-compliant open market operations

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The State Bank of Pakistan (SBP) has launched shariah-compliant open market operations as part of a wider strategy of developing the country's Islamic banking system.

Banks in Pakistan will now be able to access central bank liquidity through the purchase and sale of government-issued ijara sukuk, a shariah-compliant form of sovereign debt.

As interest is prohibited under Islamic banking, sukuk allow for a return based on partial ownership – in the case of ijara sukuk this constitutes a share of

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