The impact of economic variables on sukuk market development / Syahirah Fardiyana Saiful Annuar

The purpose of this study aimed to explore the role of macroeconomic factors on the growth of the sukuk market. This study used panel data from the World Development Index as proxies for macroeconomic stability, such as GDP per capita, exchange rate, and inflation. The development of sukuk was measured by using a proxy for sukuk issuance in the International Islamic Financial Market (IIFM), from the year 2004 to 2020. Total of 3 countries which had the most Sukuk issuers have been chosen out of 32 countries namely: Malaysia, Kingdom of Saudi Arabia, and Indonesia. The data was analysed using Pooled Ordinary Least Square (POLS) and the results showed a significant impact on GDP per capita and Exchange Rate towards the Islamic instruments. However, the inflation found not to affect the sukuk market development.
Keywords: Macroeconomic growth, GDP per capita, Exchange rate, Inflation, IIFM