Central Bank's Salam Sukuk, a Novel Instrument for Monetary Policy

The limitations of monetary policy instruments in the Iranian economy have made the policymakers encounter with some problems in implementing macroeconomic policies. Salam Sukuk is one of those instruments that have been disregarded as an instrument for macroeconomic policymaking. Our main question here is that whether Sukuk can be used as a monetary policy instrument. Using a descriptive–analytical method and utilizing the library resources, we examine the hypothesis of Salam Sukuk's being applicable as a monetary policy instrument. The findings show that the central bank, whenever judges it as necessary to decrease the money volume, may use this instrument in order to implement the proper contradicting policy. Also, we survey the challenges of Salam Sukuk in the secondary market, and, examining the different solutions, propose the solution of "the contract consisting of Hawalah and Parallel Salam in the presence of the issuer's agent".