27 October 2010 - The Edge
KUALA LUMPUR: Bank Negara Malaysia (BNM)’s International Islamic Liquidity Management Corp (IILM) will issue short-term papers as part of efforts to enhance cross-border flows.
According to BNM governor Tan Sri Dr Zeti Akhtar Aziz, the short-term papers will be issued in international reserve currencies, such as the US dollar and the euro.
“The initial ones will be in major currencies because it is to facilitate cross-border liquidity management,” she told reporters on the sidelines of the Global Islamic Finance Forum (GIFF) here yesterday.
Zeti added that the size of the short-term papers would be announced when it had been put in place.
The IILM is a collaborative effort by 11 central banks or monetary agencies, as well as two multilateral organisations to assist institutions offering Islamic financial services in addressing their liquidity management. The initiative will also facilitate greater investment flows for the Islamic financial services industry.
Zeti said the regulators collaborating with BNM for the setup of IILM would be the shareholders of the initiative, as well as sit on its board.
The 13 signatories for the setup of IILM include BNM, the central banks of Indonesia, Iran, Luxembourg and the United Arab Emirates, and multilateral organisations such as The Islamic Development Bank and the Islamic Corporation for the Development of the Private Sector.
During her presentation of the Financial Stability Report at the GIFF yesterday, Zeti said each shareholder would contribute US$5 million (RM15.5 million) as their capital for IILM.
Later, she told the media that IILM is expected to be operational within the first half of next year.
“We are in the process of hiring a CEO and putting in place other staff from the private sector who are going to be operating this new institution. It will be housed in the (Petronas) Twin Towers,” she said.
The IILM was unveiled on Monday during the GIFF, as part of an initiative to facilitate the growing significance of the international dimension of Islamic finance and its increased role in the international financial system. |
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