Citigroup launches Islamic finance products in Singapore

Murabaha is a contract between a bank and an investor for the sale of goods at a price, plus a profit margin agreed beforehand.

The bank also introduced the Islamic equivalent of interest rate swaps, foreign exchange forwards and cross-currency swaps for Singapore and Asia-Pacific.

These new products are aimed at onshore and offshore Islamic institutions, and at institutions engaged in Islamic offerings who want to manage funds in a sharia-compliant manner. Citigroup got sharia approval from scholars in the Middle East and Asia, achieving sharia harmonisation and trans-jurisdictional legal acceptability.

In the Middle East, commodity murabaha investments are common investment and financing products, which constitute about 70% of Islamic short- and medium-term money-market transactions in the Middle East market.

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