Does Islamic Banking Matter in Transmitting Monetary Policy? Empirical Evidence from Indonesia and MalaysiaIslamic banking

In a report issued on the 2nd of April 2020, Moody's Investors Service (Moody’s) has downgraded its outlook from stable to negative for the banking systems of the United Arab Emirates (UAE), Saudi Arabia, Qatar, Bahrain and Kuwait while maintaining its negative outlook on Oman’s banking system. These downgrades have been made considering the impacts of falling oil prices as well as the impact of COVID-19 on these countries. With the oil price being below the desirable level for Gulf Cooperation Council (GCC) states to balance their budgets, Government rev...

The Central Bank of Nigeria (CBN) has announced a stimulus package to support the most affected households as well as micro, small and medium enterprises (MSMEs) due to the on-going COVID-19 pandemic. Under this program USD 128.1 million (NGN 50 billion) will be provided as targeted credit facilities in the form of loans to all eligible applicants. Nigerian citizens have been encouraged to apply for these financing facilities through a dedicated website (https://nmfb.com.ng/covid-19-support/). The process would involve submitting an application through the aforesai...

Amidst concerns regarding Malaysia's affordability to inject more funds to boost its economy, ratings agencies expect Malaysia’s sovereign credit ratings to remain in-tact. Chief Executive Officer of RAM Ratings Services (Ram Ratings), Chris Lee, stated that RAM Ratings’ forecast of Malaysia's fiscal deficit to GDP projection will be in line with the Government of Malaysia’s revised expectation of 4.0% for 2020. This is after considering the additional spending on economic stimulus introduced, the&nb...

The Saudi Ministry of Labor and Social Development (MOLSD) has allocated USD 4.5 billion (SAR 17 billion) to deal with economic and employment ramifications of the COVID-19 pandemic. Nasser bin Abdulrahman Al-Hazani, a spokesperson for the MOLSD stated that the amount allocated is in line with the country’s attempt to stop the spreading of COVID-19, as well as to support the country’s workforce, private sector, and economic growth. Al-Hazani added that, expat workers whose residency permits expire before the 30th of June will be exem...

With the continuous depreciation of the PKR against the USD, global credit rating agency Moody’s has lowered Pakistan’s real GDP growth outlook. Moody’s predicts Pakistan’s 2020 economic growth to slow down to a range of 2.0% to 2.5%, reflecting the impact of COVID-19 on Pakistan’s economy. This is lower than its previous GDP forecast of 2.9%. With movement restrictions in place to stop the spread of COVID-19, Moody’s expects Pakistan’s service sector (which has strengthened the country’s...

Following an IDR 10.3 trillion stimulus package launched in February 2020, Indonesia has unveiled an additional fund worth IDR 405.1 trillion (USD 24.2 billion) on the 31st of March 2020, local media reports stated. Indonesian President, Joko Widodo, stated that of the total sum, IDR 150 trillion will be allocated for economic recovery programmes comprising credit restructuring and financing for small and medium businesses.  An amount of IDR 75 trillion is expected to be allocated towards the development of the healthcare sector in Indonesia, wh...

The Government of Malaysia has announced a financial aid package for tourism’s most vulnerable operators. The one-off payment of MYR 600 (USD 139) will be provided to registered tour bus drivers, taxi drivers, tour guides and trishaw operators.According to Malaysia’s Ministry of Finance, the Government expects this amount to ease the burden of the people who are finding their daily lives affected due to the on-going pandemic. However, President of the Malaysian Association of Tour and Travel Agents (MATTA), Datuk Tan Kok Liang, stated that the stimulus package announced by the government did n...

Moody's Investor Service (Moody’s) has positioned Kuwait under review for a downgrade of the country's sovereign long-term issuer ratings, significantly limiting the ability of the Kuwait Government to repay its debts. Moody’s stated that a downgrade was being considered due to the impacts of the significant decline in oil prices, amidst the on-going COVID-19 crisis.  Given that Kuwait’s economy is almost entirely dependent on oil, falling oil prices have caused a great deal of uncertainty over the Government’s ability to access adequate sources of finance. ...

Although the economies of United Arab Emirates (UAE) and Kingdom of Saudi Arabia (KSA) have slowed-down in response to the ongoing macroeconomic challenges, financial experts forecast positive economic growth for these two countries to be above most other nations in the broader Middle East and North Africa (Mena). Economists anticipate Oil-producing GCC economies to perform better compared to the broader MENA region. Citing Simon Ballard, Chief Economist at First Abu Dhabi Bank; “The trajectory of economic performance in the UAE will be of a very shallow...