IslamicFinance.de

The Dubai Gold & Commodities Exchange (DGCX) and Ayedh Dejem Group have agreed to develop and launch the Middle East’s first Sharia compliant Spot Gold contract to be traded on an international exchange. This development is reflective of the growing potential of the Saudi Arabian and wider GCC regions Sharia compliant gold markets. Ayedh Bin Dejem, Chairman for the Group, said this cross-border collaboration offered access to the regional gold and commodities market. It provides customers with improved hedging and investment solutions in compliance with Sharia law. DGCX Chief Executive Gaurang Desai added that Amanie Advisors LLC, the leading global Islamic Finance advisory firm, have been selected to advise on the initiative. The launch of this product appealing to a wider range of investors in the region is an ideal way for the Exchange to extend its reach.

Saudi Arabia’s government is investigating the country’s banks for creating structured products which allow traders to speculate on the possible end of the currency’s US Dollar peg. Saudi officials continue to maintain that the country has no plans to devalue, and a number of political analysts say such a move would be a last resort. Saudi Arabia’s oil price driven crisis has seen the country’s budget deficit widening out to 19% of GDP. This caused a collapse in government spending which has slowed economic growth to near zero. A devaluing of the Riyal would increase oil revenues in Riyal terms and provide more domestic revenues for the government, but would make imports a lot more expensive.