(EIIB.L) European Islamic Investment Bank PLC Buy/Sell

LONDON, Oct 8 (Reuters) - UK-listed Islamic bank European Islamic Investment Bank (EIIB) has signed a deal with Standard Chartered Bank to hedge foreign exchange risk.
Standard Chartered said in a statement on Thursday originally issued in Singapore that the Sharia-compliant structured foreign exchange hedging deal was its first in Europe.
No one at Standard Chartered or the EIIB was available for further comment.
Standard Chartered said it had developed new documentation, which allows foreign exchange hedging with an option component, backed by an exchange of commodities for each leg of the transaction. This allows the EIIB to broaden its investment horizon in a sharia compliant way.

Islamic forex hedging transactions must involve tangible assets. The exchange of commodities is integral to the underlying contract because the counterparties must avoid interest accrual, as required by Islamic law.

(Reporting by Cecilia Valente; Editing by Greg Mahlich) Keywords: STANCHART EIIB SHARIA/FOREX (cecilia.valente@thomsonreuters.com; +44 (0)20 75423570; Reuters Messaging: cecilia.valente.thomsonreuters.com@reuters.net)

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