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MCC Approves New Islamic Bond

MCC Approves New Islamic BondMCC Approves New Islamic Bond

The Money and Credit Council - the top monetary decision-making body - approved a proposal by the Central Bank of Iran to issue a new type of ‘Wadieh’ Islamic bond to tame money flow. 
According to a CBI press release, the bonds will have a 2-year maturity with interest rates proposed by the CBI. Interest will be determined subject to inflation but “will not exceed the annual inflation rate”.  
Not much is known about Wadieh bonds, including the amount  and date of issue. However as the name suggests (Wadieh in Arabic means deposit), it appears that it would be similar to certificate of deposits with the difference being that the latter bears a fixed interest rate while in the former people deposit their money with banks to receive the principal on maturity plus an unspecified amount in interest. 

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