مجلة بحوث الاقتصاد والمناجمنت
Volume 7, Numéro 1, Pages 85-105
2026-07-09

Open Market Operations And Their Suitability With Islamic Banks

Authors : Mr Sami Ghaben .

Abstract

This essay discusses how it might be possible to use Islamic sukuk in doing business in an open market even when there are not much money or many institutions around. The main subject of this essay is the Palestinian economy, which does not have a state currency and does not have much power over its funds. For most monetary systems, central banking relies a great deal on open market activities. But they do not follow the rules of Islamic finance since their tools charge interest on them. Because of this mismatch, Islamic banks have a problem. When this happens, it is really tough for Islamic banks to manage their cash flow. This study is trying to figure out what is going on with this problem. It is using two ways of looking at the problem looking at the actual happenings, and the analysis of the information. This study looks at the various rules and systems in place for the control of money in Palestine, and also at what other people have found out about finance and monetary policy. For example, the article cites some examples from other countries, such as Sudan and Malaysia, where they use Shariah-compliant goods in order to control the flow of money. Islamic banks in these countries have been able to manage their cash flow. Islamic finance is really important, in these countries, and it has found a way of making this work. Islamic banks in the banking system have some real issues. The data shows that Islamic sukuk, the kind which is based upon the principle of asset-based and ijara, is what is needed for open market operations by Islamic banks. This is because Islamic sukuk follows the rules of Shariah and can be transferred sold and bought.. The way Islamic sukuk is structured and set up makes it very hard for Islamic banks to use sukuk in Palestine. Islamic banks have to deal with a lot of problems when it comes to sukuk in Palestine. Some of these are no national currency, the central bank not being that powerful, the absence of a law framework that is clear concerning the issuance of sovereign sukuk, and an unsatisfactory condition of the financial market infrastructure. Therefore, sukuk cannot be fully substituted for traditional open market operations yet, but they can contribute to liquidity and stabilize the economy.

Keywords

Palestine, Islamic banks, Islamic sukuk, monetary policy, open market activities