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CIMB Islamic Offers Syariah-Compliant Forex Product

with 2 comments

Points of Essence:

  • CIMB Islamic Bank has introduced an innovative Shariah compliant  FOREX investment product known as FXOP-i. The product will allow customers to cap the forex risk in advance to maximise returns on their investment in accordance with the Islamic principles of tawarruq, commodity murabahah, bai al inah, waad and bai al sarf.

KUALA LUMPUR, Oct 13 (Bernama) — CIMB Islamic Bank Bhd has launched FXOP-i, an Islamic foreign exchange instrument with Syariah-compliant option features which allows customers to hedge their foreign exchange (forex) risk.

“FXOP-i enables customers to lock in a forex rate in advance by engaging in a Shariah-compliant financial transaction with CIMB Islamic,” the bank said in a statement Monday.

“With this product, customers can protect the value of their future foreign currency proceeds, fix their hedging cost at the equivalent of the option premium and even earn a profit if forex rates move in their favour, always with the assurance that the transaction adheres to Islamic principles,” said chief executive officer Badlisyah Abdul Ghani.

A feature of FXOP-i is that customers can choose to undertake the transaction using either the commodity murabahah or Bai al-Inah concepts, the bank said.

The product is based on several Islamic finance concepts, namely tawarruq (trading between more than two parties), by way of commodity murabahah (sale at cost plus), Bai al-Inah (trading between two parties), Waad (promise) and Bai al-Sarf (contract of exchange, money for money).

“FXOP-i adds diversity and choice to the range of forex hedging instruments available in the market, currently dominated by conventional products,” Badlisyah said.

He said customers could now not only opt to manage the risk of their foreign currency exposure in a Syariah-compliant manner, but they could also pick the most competitive solution from both conventional and Islamic products.

The minimum value for each FXOP-i transaction is US$100,000 equivalent.



Written by Suapi Shaffaii

October 13, 2008 at 10:39 pm

2 Responses

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  1. It is a great news actually. So now Malaysian can make full use of this product to trade in the FOREX market.


    July 19, 2009 at 8:17 pm

  2. i hope this product can launch in indonesian too.. 😀

    November 16, 2009 at 6:41 pm

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