Developing A Sharia-Compliant Hybrid Hedging Framework for Managing Exchange Rate and Inflation Risks
DOI:
https://doi.org/10.23917/ijoel.v3i2.16390Keywords:
Aqad Murakkab, Wa’ad, Asset Value Protection, Exchange Risk, InflationAbstract
This study examines the design of Aqad Murakkab and Wa’ad as Sharia-compliant hedging mechanisms to safeguard asset value amid exchange rate volatility and inflationary pressures. Utilising a conceptual and normative methodology, the analysis investigates the relationships among hybrid contractual arrangements, commitment-based transactions, exchange rate risk management, inflation risk, and the preservation of economic value. The findings indicate that Aqad Murakkab functions as a constitutional framework connecting present commitments to future economic obligations, while Wa’ad provides exchange-rate certainty through a commitment mechanism for upcoming foreign-exchange obligations. Both mechanisms contribute to asset value protection by addressing exchange rate risk, identified as the primary transmission channel between contractual design and value preservation. Furthermore, inflation risk intensifies the need for protection, as rising prices may reduce assets’ ability to meet anticipated future requirements. A key distinction emerges between traditional hedging and the DSN-MUI approach: traditional hedging focuses on direct protection against expected price increases, whereas Sharia hedging, as specified in DSN-MUI Fatwa No. 96 of 2015, emphasises exchange rate risk management as the principal Sharia-compliant strategy for protecting asset value. This study proposes a Sharia asset value protection framework that integrates contractual, monetary, and value-preservation components.
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