Open market operations through central bank Wadiah Sukuk: Nature, operational model, and jurisprudential principles

Central bank Wadiah Sukuk is one of the latest innovations of the Iranian Central Bank in the implementation of open market operations in accordance with Sharia, which has features such as simplicity, protection from inflation, and no need for the Central Bank to enter the activities of the real sector of the economy (unlike other types of Sukuk). The main question of the research is what is the operational model and jurisprudential principles of using Wadiah Sukuk based on the decision of the jurisprudential council of the Iranian Central Bank and what are the religious considerations related to this instrument? The research findings obtained by the descriptive method and content analysis show that in Wadiah Sukuk, the holders' relationship with the central bank is based on a Wadiah contract and not a loan contract, and therefore the collected funds do not become the property of the central bank; It is blocked in order to carry out contractionary open market operations. Overpayment on this Sukuk is also not a contractual obligation; It is a surplus paid unilaterally by the central bank to encourage buyers. Also, although the issue of compensation for the devaluation of money is one of the disputed jurisprudential issues, this challenge does not cause any damage to the approved pattern of Wadiah Sukuk; Because the jurisprudential-legal basis of overpayment in this Sukuk is "unconditional gift". Finally, the secondary market of Wadiah Sukuk is limited and in order to prevent the jurisprudential doubt of money-money transactions (Riba), it is only possible to transfer the Sukuk at face value. The research policy recommendation is the need to monitor the proper execution of the Wadiah Sukuk in practice and in particular to prevent the unconditional gift from becoming an implicit condition (or association) over time and creating suspicion of usury.