Al-muraj ah al-Islamiyah
Definition of "Al-muraj ah al-Islamiyah"
Lit: Islamic swap. Tech: A financial technique followed by Islamic banks in which two banks agree to swap with each other two deposits denominated in different currencies for a fixed period but on interest-free basis. During the period they are holding these deposits, each one of them is free to invest it and earn a return on it. Any profit or loss accrues to the party investing. After the expiry of the agreed period, the original swaps are reversed.