Do Islamic banks have their benchmarks for financing rates in the dual-banking system?

This study examines whether conventional bank lending rates influence Islamic financing in Indonesia and Malaysia that apply the dual-banking system. We employ ARDL, non-linear ARDL (NARDL) model, Pooled Mean Group (PMG). Evidence of long-run link between rate is found. However, instead symmetry, them asymmetry. The asymmetric pricing some specific contracts such as Mudharaba Murabaha strongly follow decrease rate, but it sticky against increase rate. obviously pegged to PMG results strengthen findings where effect a reduction larger than an on These imply borrowers are profit-driven Accordingly, pushed due uncompetitive