Liquidity-management instrument availability for Islamic banks has expanded across many core markets over the past decade, supporting funding needs, according to Fitch Ratings. However, gaps remain relative to conventional banks, more so in countries where Islamic banks remain niche.
The heightened volatility in commodity prices, profit rates, and exchange rates following the onset of the Iran war has reinforced the importance of Islamic derivatives for risk management, Fitch Ratings says. However, adoption is fragmented, and varies by sector and country.
