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Relationship between conventional and Islamic interbank rates of a dual banking system in Malaysia, Middle East, and Western countries / Zetty Zahureen Mohd Yusoff and Nur Lylia Azha

The purpose of this research is to investigate the relationship between conventional monetary policy rate (CIMMR) and Islamic monetary policy rate (IIMMR) in Malaysia and selected Middle East countries and Western countries. This study runs a panel Cointegration test, a panel VECM and Wald test to e...

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Main Authors: Mohd Yusoff, Zetty Zahureen, Azha, Nur Lylia
Format: Article
Language:English
Published: Universiti Teknologi Mara, Selangor: Puncak Alam Campus: Faculty of Business and Management 2019
Subjects:
Banking
Finance, Islamic
Online Access:http://ir.uitm.edu.my/id/eprint/28911/1/28911.pdf
http://ir.uitm.edu.my/id/eprint/28911/
https://jibe.uitm.edu.my/
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spelling my.uitm.ir.289112020-03-23T16:17:33Z http://ir.uitm.edu.my/id/eprint/28911/ Relationship between conventional and Islamic interbank rates of a dual banking system in Malaysia, Middle East, and Western countries / Zetty Zahureen Mohd Yusoff and Nur Lylia Azha Mohd Yusoff, Zetty Zahureen Azha, Nur Lylia Banking Finance, Islamic The purpose of this research is to investigate the relationship between conventional monetary policy rate (CIMMR) and Islamic monetary policy rate (IIMMR) in Malaysia and selected Middle East countries and Western countries. This study runs a panel Cointegration test, a panel VECM and Wald test to examine the relationship and causal effect between the CIMMR and IIMMR for the sample of six countries starting from 2009 until 2018 based on monthly and yearly basis dataset. This study finds that CIMMR and IIMMR, in monthly and yearly basis, are both cointegrated and have a long-run relationship amongst them. Our findings confirm that there is a long run causality effect between conventional and Islamic monetary policies based on monthly interbank rates. Our findings further confirm that there is a short run causality effect between conventional and Islamic monetary policies based on yearly interbank rates. We confident that the implication of Islamic interbank rates in the implementation of monetary policy within a dual system is very high as proven by taking into consideration a different regions as samples for this panel study. To the best of the authors’ knowledge, this would greatly contribute to the body of knowledge in the field of monetary policy. Universiti Teknologi Mara, Selangor: Puncak Alam Campus: Faculty of Business and Management 2019 Article PeerReviewed text en http://ir.uitm.edu.my/id/eprint/28911/1/28911.pdf Mohd Yusoff, Zetty Zahureen and Azha, Nur Lylia (2019) Relationship between conventional and Islamic interbank rates of a dual banking system in Malaysia, Middle East, and Western countries / Zetty Zahureen Mohd Yusoff and Nur Lylia Azha. Journal of International Business, Economics and Entrepreneurship (JIBE), 4 (2). pp. 38-45. ISSN 2550-1429 https://jibe.uitm.edu.my/
institution Universiti Teknologi Mara
building Tun Abdul Razak Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Teknologi Mara
content_source UiTM Institutional Repository
url_provider http://ir.uitm.edu.my/
language English
topic Banking
Finance, Islamic
spellingShingle Banking
Finance, Islamic
Mohd Yusoff, Zetty Zahureen
Azha, Nur Lylia
Relationship between conventional and Islamic interbank rates of a dual banking system in Malaysia, Middle East, and Western countries / Zetty Zahureen Mohd Yusoff and Nur Lylia Azha
description The purpose of this research is to investigate the relationship between conventional monetary policy rate (CIMMR) and Islamic monetary policy rate (IIMMR) in Malaysia and selected Middle East countries and Western countries. This study runs a panel Cointegration test, a panel VECM and Wald test to examine the relationship and causal effect between the CIMMR and IIMMR for the sample of six countries starting from 2009 until 2018 based on monthly and yearly basis dataset. This study finds that CIMMR and IIMMR, in monthly and yearly basis, are both cointegrated and have a long-run relationship amongst them. Our findings confirm that there is a long run causality effect between conventional and Islamic monetary policies based on monthly interbank rates. Our findings further confirm that there is a short run causality effect between conventional and Islamic monetary policies based on yearly interbank rates. We confident that the implication of Islamic interbank rates in the implementation of monetary policy within a dual system is very high as proven by taking into consideration a different regions as samples for this panel study. To the best of the authors’ knowledge, this would greatly contribute to the body of knowledge in the field of monetary policy.
format Article
author Mohd Yusoff, Zetty Zahureen
Azha, Nur Lylia
author_facet Mohd Yusoff, Zetty Zahureen
Azha, Nur Lylia
author_sort Mohd Yusoff, Zetty Zahureen
title Relationship between conventional and Islamic interbank rates of a dual banking system in Malaysia, Middle East, and Western countries / Zetty Zahureen Mohd Yusoff and Nur Lylia Azha
title_short Relationship between conventional and Islamic interbank rates of a dual banking system in Malaysia, Middle East, and Western countries / Zetty Zahureen Mohd Yusoff and Nur Lylia Azha
title_full Relationship between conventional and Islamic interbank rates of a dual banking system in Malaysia, Middle East, and Western countries / Zetty Zahureen Mohd Yusoff and Nur Lylia Azha
title_fullStr Relationship between conventional and Islamic interbank rates of a dual banking system in Malaysia, Middle East, and Western countries / Zetty Zahureen Mohd Yusoff and Nur Lylia Azha
title_full_unstemmed Relationship between conventional and Islamic interbank rates of a dual banking system in Malaysia, Middle East, and Western countries / Zetty Zahureen Mohd Yusoff and Nur Lylia Azha
title_sort relationship between conventional and islamic interbank rates of a dual banking system in malaysia, middle east, and western countries / zetty zahureen mohd yusoff and nur lylia azha
publisher Universiti Teknologi Mara, Selangor: Puncak Alam Campus: Faculty of Business and Management
publishDate 2019
url http://ir.uitm.edu.my/id/eprint/28911/1/28911.pdf
http://ir.uitm.edu.my/id/eprint/28911/
https://jibe.uitm.edu.my/
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score 13.211869

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