After ten years of developing Sharia Open Market Operation (OMO), the proportion of Sharia OMO transactions in total OMO in Indonesia remains at 10%. The fact that there are only three variations of Sharia OMO products in Indonesia demonstrates the stagnation of Sharia OMO. This number is lower than Malaysia, which has five Sharia OMO products.

Sharia OMO is a monetary policy tool used by central banks to control the liquidity of Islamic banks. Sharia OMO operates in a different way than conventional OMO. OMO Sharia as an instrument of Islamic monetary policy is strongly intertwined to the Islamic values established in the Qur'an and Hadith. Sharia OMO, unlike conventional OMO, uses profit sharing (PLS) as an incentive rather than interest rates to avoid usury practices. Sharia OMO also makes no guarantees about avoiding the practice of maysir or speculation.

Sharia OMO operates in the same manner as conventional OMO, namely absorption and injection. Absorption's goal is to absorb bank liquidity. When a commercial bank has too much liquidity, the central bank will absorb. This action keeps too much money from circulating in society and helps to keep inflation at bay. When the central bank notices that commercial banks have insufficient liquidity, it takes action to increase bank liquidity.

The Wadiah Bank Indonesia Certificate (SWBI) was the first Sharia OMO issued by Bank Indonesia in 2000. The Fatwa of the National Sharia Council (DSN) MUI No. 36 / DSN-MUI / X / 2002 concerning SWBI has legitimized its existence. SWBI is a Sharia-compliant OMO product that makes use of wadi'ah contracts or fund custody. However, due to SWBI's lackluster prospects and failure to provide rewards commensurate with the funds invested, SWBI was replaced in 2008 by a Certificate of Bank Indonesia Syariah (SBIS).

SBIS issuance could be a form of innovation by Bank Indonesia to continue improving and improving Sharia OMO in Indonesia. Unlike SWBI, which uses wadi'ah contracts, SBIS uses ju'alah contracts or commitments to provide a variety of rewards when certain goals are met. Bank Indonesia rewards Islamic banks for actively contributing to monetary control. The rewards will be adjusted based on the weighted average discount rate of the results of the Bank Indonesia Certificate (SBI) auction.

Reserve Repo SBSN is a sharia-compliant bond issued by the government with the promise to be repurchased at a predetermined tenor. SBSN has been in print since 2008. The contract in this transaction is known as ba'i ma'a i-wa'ad.

Sukuk Bank Indonesia (SukBI) is another Sharia OMO instrument available in Indonesia, having been officially launched at the end of 2018 with the al-musyarakah al-muntahiyah bi al-tamlik contract scheme. SukBI was founded in order to advance sharia practice in financial markets. The ability of underlying assets to be traded is the key distinction between SBIS and SukBI. SBIS prohibits the trading of underlying assets, whereas SukBI has underlying assets that can be traded in the secondary market. The underlying assets of SukBI are now Sharia Securities (SBSN) and global Sukuk owned by Bank Indonesia.

Written by: Eka Puspa Dewi, Student at Airlangga University's Department of Sharia Economics, Faculty of Economics and Business.

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