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Towards Stabilization of the World Monetary System: A Shariah Perspective نحو استقرار النظام النقدي العالمي: منظور شرعي

Adam Abdullah ()
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Adam Abdullah: Assist. Prof., Institute of Islamic Banking and Finance (IIiBF) International Islamic University Malaysia (IIUM)

Journal of King Abdulaziz University: Islamic Economics, 2017, vol. 30, issue 2, 71-78

Abstract: In essence, the author proposes a supra-national complementary currency that seeks to provide monetary and financial stability. There are some technical issues relating to the demurrage charge which, rather than an interest rate, could be replaced by the zakah rate in order to prevent hoarding and encourage circulation of the TRC. However, the author proposes a trade-reference currency (TRC) which as a money-of-account is defined in terms of a basket of commodities, and thus deemed inflation-free. This paper intends to analyze various monetary reform proposals since it is useful to understand the chronology of proposals that have anticipated this particular concept of a TRC. In fact, it is not without precedent from an Islamic perspective and was anticipated under the Ayyubids by none other than Saladin in 1171 (Abdullah, 2016). The army dinar or dinar jayshi (DJ), was an important money-of-account used to determine the present value of agricultural land for land concessions (iqta) granted by the Sultan for military service, in lieu of a stipend.

Date: 2017
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DOI: 10.4197/Islec.30-2.7

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Handle: RePEc:abd:kauiea:v:30:y:2017:i:2:no:7:p:71-78