Islamic Ijarah Sukuk as a tool to enhance financial stability -Models of some Arab countries and Southeast Asian countries-

Abstract

Islamic sukuk are among the most important tools of Islamic finance, as they serve as an alternative to usurious bonds. One of the most prominent and famous types of sukuk is known as "Ijarah Sukuk". This latter ensures the connection between the monetary and tangible economies, thereby achieving what is called financial stability. The study aims to shed light on the most important innovations in Islamic finance within the realm of Ijarah sukuk, which keep up with technological advancements and contribute to keeping pace with economic and social development. Additionally, they serve as stabilizing factors for investment projects during financial crises, thereby enhancing financial stability. The study utilized a descriptive-analytical methodology, employing the Z-Score indicator for financial stability and the issuance rate of Islamic Ijarah Sukuk. The study concludes that the relationship between Islamic Ijarah sukuk and financial stability is not always positive. At times, it may exhibit an inverse relationship. Therefore, it is essential to encourage the use of Ijarah sukuk while simultaneously promoting financial innovation in financial institutions and Islamic banks to effectively address financial shocks and strengthen financial stability.