In countries under Islamic law, financial instruments have been invented to avoid the restrictions on interest rates, but have much the same effect.

Question

Quizplus · Accepted Answer

Islamic law prohibits charging or paying interest rates, so financial instruments such as Islamic bonds (sukuk) and Islamic finance products like murabaha, ijara and musharaka have been developed to comply with this rule. However, these instruments often have similar economic effects as interest-based financial products.

In Countries Under Islamic Law, Financial Instruments Have Been Invented