Simulation of Shariah compliant commodity backed currency system: a Turkish case-study

In view of the continuing episodes of financial crises faced by the Turkish economy, this study analyses the potential economic benefit of implementing the Grondona system of conditional currency convertibility. The authors performed simulations of the Grondona system based on Grondona's guidel...

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Main Authors:	Ahmed, Jameel, Collins, Patrick, Mydin Meera, Ahamed Kameel
Format:	Article
Language:	English English
Published:	Research Centre Islamic Economics (IKAM) 2018
Subjects:	HB126.4 Islamic Economics HG201 Money
Online Access:	http://irep.iium.edu.my/3108/ http://irep.iium.edu.my/3108/ http://irep.iium.edu.my/3108/ http://irep.iium.edu.my/3108/1/3108_Simulation%20of%20Shariah%20Compliant.pdf http://irep.iium.edu.my/3108/2/3108_Simulation%20of%20Shariah%20Compliant_WOS.pdf

id	iium-3108
recordtype	eprints
spelling	iium-31082019-01-31T02:21:40Z http://irep.iium.edu.my/3108/ Simulation of Shariah compliant commodity backed currency system: a Turkish case-study Ahmed, Jameel Collins, Patrick Mydin Meera, Ahamed Kameel HB126.4 Islamic Economics HG201 Money In view of the continuing episodes of financial crises faced by the Turkish economy, this study analyses the potential economic benefit of implementing the Grondona system of conditional currency convertibility. The authors performed simulations of the Grondona system based on Grondona's guidelines (1975) in order to examine the impact of the system's operations on the Turkish economy. For simulations, the annual data about Turkish primary commodity imports was retrieved using the WITS (World Integrated Trade Solution) software developed by the World Bank. The monthly data about primary commodity prices was accessed from the IndexMundi website. The authors used a program developed in C++ for performing simulations, and analyzed the simulation results by using Microsoft Excel. The results of the simulations clearly show the system's role in stockpiling reserves of primary imported commodities in response to a fall in market prices, and releasing the reserves during periods of rising prices. Such a mechanism helps to stabilise the prices of primary commodities and lessen the pressure on primary commodities markets during both slump and boom periods. Graphs are also included to show how the Commodities Reserve Department's (CRD) transactions would have caused corresponding changes in the Turkish money supply. These would have a stabilizing influence on the real value of the Turkish Lira in terms of the commodities handled. In addition the paper discusses the multiple reasons why the system has been judged to be Shariah-compliant. Research Centre Islamic Economics (IKAM) 2018-08 Article PeerReviewed application/pdf en http://irep.iium.edu.my/3108/1/3108_Simulation%20of%20Shariah%20Compliant.pdf application/pdf en http://irep.iium.edu.my/3108/2/3108_Simulation%20of%20Shariah%20Compliant_WOS.pdf Ahmed, Jameel and Collins, Patrick and Mydin Meera, Ahamed Kameel (2018) Simulation of Shariah compliant commodity backed currency system: a Turkish case-study. Turkish Journal of Islamic Economics (TUJISE), 5 (2). pp. 95-127. ISSN 2587-2303 E-ISSN 2587-232X https://www.tujise.org/content/7-issues/10-5-2/m029/tuj029.pdf 10.26414/m029
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English English
topic	HB126.4 Islamic Economics HG201 Money
spellingShingle	HB126.4 Islamic Economics HG201 Money Ahmed, Jameel Collins, Patrick Mydin Meera, Ahamed Kameel Simulation of Shariah compliant commodity backed currency system: a Turkish case-study
description	In view of the continuing episodes of financial crises faced by the Turkish economy, this study analyses the potential economic benefit of implementing the Grondona system of conditional currency convertibility. The authors performed simulations of the Grondona system based on Grondona's guidelines (1975) in order to examine the impact of the system's operations on the Turkish economy. For simulations, the annual data about Turkish primary commodity imports was retrieved using the WITS (World Integrated Trade Solution) software developed by the World Bank. The monthly data about primary commodity prices was accessed from the IndexMundi website. The authors used a program developed in C++ for performing simulations, and analyzed the simulation results by using Microsoft Excel. The results of the simulations clearly show the system's role in stockpiling reserves of primary imported commodities in response to a fall in market prices, and releasing the reserves during periods of rising prices. Such a mechanism helps to stabilise the prices of primary commodities and lessen the pressure on primary commodities markets during both slump and boom periods. Graphs are also included to show how the Commodities Reserve Department's (CRD) transactions would have caused corresponding changes in the Turkish money supply. These would have a stabilizing influence on the real value of the Turkish Lira in terms of the commodities handled. In addition the paper discusses the multiple reasons why the system has been judged to be Shariah-compliant.
format	Article
author	Ahmed, Jameel Collins, Patrick Mydin Meera, Ahamed Kameel
author_facet	Ahmed, Jameel Collins, Patrick Mydin Meera, Ahamed Kameel
author_sort	Ahmed, Jameel
title	Simulation of Shariah compliant commodity backed currency system: a Turkish case-study
title_short	Simulation of Shariah compliant commodity backed currency system: a Turkish case-study
title_full	Simulation of Shariah compliant commodity backed currency system: a Turkish case-study
title_fullStr	Simulation of Shariah compliant commodity backed currency system: a Turkish case-study
title_full_unstemmed	Simulation of Shariah compliant commodity backed currency system: a Turkish case-study
title_sort	simulation of shariah compliant commodity backed currency system: a turkish case-study
publisher	Research Centre Islamic Economics (IKAM)
publishDate	2018
url	http://irep.iium.edu.my/3108/ http://irep.iium.edu.my/3108/ http://irep.iium.edu.my/3108/ http://irep.iium.edu.my/3108/1/3108_Simulation%20of%20Shariah%20Compliant.pdf http://irep.iium.edu.my/3108/2/3108_Simulation%20of%20Shariah%20Compliant_WOS.pdf
first_indexed	2023-09-18T20:10:48Z
last_indexed	2023-09-18T20:10:48Z
_version_	1777407464080146432

Simulation of Shariah compliant commodity backed currency system: a Turkish case-study

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