Regulatory Alerts2025-01-07
Instruction No. 01/GR/2025 on the Establishment of Islamic Money Market Instruments
The Governor of the Central Bank of Mauritania issued Instruction No. 01/GR/2025 to establish three new Sharia-compliant money market instruments: the Islamic Deposit Facility (FDIS), Islamic Lending Facility (FPIS), and Interbank Islamic Lending Operation (PISI). The directive mandates that authorized Mauritanian banks utilize these 24-hour tenor instruments, which are structured around Murabaha contracts involving the purchase and resale of tangible assets, to manage liquidity through the central bank or interbank markets. It further authorizes the central bank to act as an agent for settlement via specialized Sharia-compliant platforms and stipulates that any costs arising from international asset transactions will be borne by participating banks.
Islamic Republic of Mauritania The Governor
Nouakchott, 07 JAN 2025
Instruction No. 01/GR/2025 Establishing Islamic Money Market Instruments
The Governor of the Central Bank of Mauritania
- Having regard to Law No. 73 of 30 May 1973 establishing the Central Bank of Mauritania;
- Having regard to Law No. 2018-034 of 8 August 2018 on the statutes of the Central Bank of Mauritania;
- Having regard to Law No. 2018-036 bis of 16 August 2018 on the regulation of credit institutions;
- Having regard to Decree No. 041/2022 of 31 March 2022 appointing the Governor of the Central Bank of Mauritania;
- Having regard to the minutes of the Sharia Compliance Committee dated 02 January 2025.
Decides:
Article 1: Instruments (FDIS - FPIS - PISI) The following financial instruments are hereby created within the Mauritanian money market:
- The "Islamic Deposit Facility" or "FDIS": defined as a deposit facility operation compliant with the principles of Islamic finance (Sharia).
- The "Islamic Lending Facility" or "FPIS": defined as a refinancing operation in the form of a collateralized loan compliant with the principles of Islamic finance (Sharia).
- The "Interbank Islamic Lending Operation" or "PISI": defined as an interbank Murabaha operation (unsecured or collateralized) compliant with the principles of Islamic finance (Sharia).
Article 2: The instruments defined in Article 1 are based on the purchase and resale of goods, notably raw materials or other tangible assets existing and identified by the BCM (Murabaha). These goods may be located in Mauritania or abroad.
The purchase and sale operations of said goods are carried out based on contracts compliant with the principles of Islamic finance (Sharia).
Article 3: Execution of (FDIS-FPIS-PISI) FDIS, with a 24-hour tenor, are executed as unsecured deposits with the BCM at the same rate as the conventional deposit facility. FPIS, with a 24-hour tenor, are executed as collateralized loans granted by the BCM to a commercial bank at the same rate as the marginal lending facility. PISI are executed as liquidity exchanges in MRU between banks, with or without collateral, at a rate freely negotiated between the contracting counterparties.
Article 4: Only banks authorized in Mauritania are eligible to participate in the operations defined in Article 1.
Article 5: Banks may, at their own initiative, utilize the Islamic deposit facilities to establish 24-hour deposits or request 24-hour refinancing from the BCM.
Article 6: Any participant in the operations cited in Article 1 grants powers to the BCM to act on their behalf and for their account, and to take all necessary measures for the proper execution of operations in the market.
Article 7: The powers granted to the BCM are defined within the framework of the "mandate" signed by each bank, the template of which is attached to this instruction.
Article 8: The powers conferred upon the BCM under Article 7 enable it to settle the transactions necessary for the proper functioning of the operations defined in Article 1, in accordance with specialized Islamic finance financial market standards, via specialized platforms meeting Sharia compliance criteria.
Article 9: When the purchase and resale transactions of assets necessary for the proper execution of the operations defined in Article 1 take place on international markets, they may generate financial costs borne by the participants in these operations.
Article 10: This instruction enters into force as of its signature date. It repeals and replaces all prior provisions that are contrary or duplicative.
Mohamed Lamine DHEHBY The Governor