Profit rate risk will affect the value of the investments, given the profit rate movements, which are influenced by regional and local economic developments as well as political developments.
Profit rate moves in the opposite direction of bond/sukuk prices. When profit rates rise, bond/sukuk prices will fall and vice versa. When profit rate trend is anticipated to rise, the fund manager will reduce the exposure to fixed income securities.
Domestic profit rates on deposits and placements with licensed finanacial institutions are determined based on prevailing market rates.
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