Riba Avoidance, Naqd Principles, and Perceived Islamic Macroeconomic Stability

Abdul Wahab; Syaifuddin; Chamim Thohari

doi:10.61255/jeemba.v4i5.2199

Authors

Abdul Wahab Universitas Muhammadiyah Surabaya, Surabaya, 60113, Indonesia
Syaifuddin IAIN Ternate, Ternate, 97727, Indonesia
Chamim Thohari Universitas Muhammadiyah Surabaya, Surabaya, 60113, Indonesia

DOI:

https://doi.org/10.61255/jeemba.v4i5.2199

Keywords:

Perceived Islamic Macroeconomic Stability, Monetary Justice, Naqd Principles, Riba Avoidance, Role of Money as Medium of Exchange

Abstract

Purpose – This study examines how Understanding of Naqd, Riba Avoidance Orientation, Perceived Monetary Justice, and the Role of Money as a Medium of Exchange are associated with perceived Islamic macroeconomic stability. It also tests the indirect relationship between Understanding of Naqd and perceived stability through the Role of Money as a Medium of Exchange.

Design/methodology/approach – A quantitative explanatory survey was conducted with 100 purposively selected respondents drawn from Islamic economics students, academics, Islamic finance practitioners, and Muslim community members with knowledge relevant to the study. The data were analyzed using PLS-SEM in SmartPLS through measurement-model and structural-model assessment, including direct and specific indirect effects.

Findings/Results – Understanding of Naqd (β = 0.303, p < .001), Riba Avoidance Orientation (β = 0.260, p = .011), and the Role of Money as a Medium of Exchange (β = 0.327, p = .001) were positively associated with perceived Islamic macroeconomic stability. Perceived Monetary Justice was not significant (β = 0.054, p = .634). The indirect path through the Role of Money as a Medium of Exchange was significant (β = 0.250, p = .001). Although reliability and convergent validity were acceptable, several HTMT ratios exceeded 0.90, so the structural findings require cautious interpretation.

Originality/Value – The study integrates monetary understanding, riba avoidance, monetary justice, and the exchange function of money in one individual-level model. It extends Islamic finance research from institutional stability and product adoption toward the cognitive and evaluative processes underlying perceived Islamic macroeconomic stability.

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