Hedging Practices in the Indonesian Banking Sector: A Maqasid al-Shari'ah Perspective

Arfarizan Arfarizan; Riski Eka  Lestari

doi:10.63922/ijebir.v5i05.5840

Arfarizan Arfarizan Ibnu Chaldun University, Indonesia
Riski Eka Lestari Nahdlatul Ulama University of Lampung, Indonesia

DOI: https://doi.org/10.63922/ijebir.v5i05.5840

Keywords: Hedging, Maqashid al-Shariah, Islamic Banking, Risk Management.

Abstract

This study aims to analyze the implementation of hedging in Islamic banking in Indonesia and its alignment with the objectives of maqashid al-shariah. The background of this research is the increasing exposure to foreign exchange risk faced by national banks in line with the growth of international trade. The research method employed is a qualitative approach, emphasizing the exploration of meaning, interpretation, and normative analysis of the concept of hedging from a sharia perspective. The findings reveal that Islamic hedging practices have been implemented through instruments that comply with sharia principles, such as ‘Aqd Al-Tahawwuthal Al-Basith and ‘Aqd Al-Tahawwuthal Al-Murakkab, which serve as risk mitigation tools against currency fluctuations without involving elements of riba, gharar, and maysir. Further analysis shows that Islamic hedging not only fulfills the objective of hifdz al-maal (protection of wealth) but also contributes to hifdz ad-diin (protection of religion), hifdz an-nafs (protection of life), hifdz al-aql (protection of intellect), and hifdz an-nasl (protection of progeny). Thus, Islamic hedging serves as a comprehensive risk management instrument that aligns with the holistic objectives of maqashid al-shariah. This study recommends enhancing public literacy and promoting innovation in Islamic hedging instruments to address the increasingly complex market demands while maintaining economic stability based on Islamic ethical principles.

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