This book presents the monetary policy tool from Islamic perspective and its critical impact in the transmission of monetary policy of a dual financial system. It is recommended for those seeking basic knowledge about the transmission of an interest rate within a dual system that may affect the effectiveness of monetary policy.The analysis should be of high value to professional economists and students alike, and benefits researchers who wish to know the degree to which the Islamic and conventional interbank rates are correlated and whether each rate acts similarly on inflation and exchange rates. It also helps in organising information, constructing a conceptual or theoretical framework, or even writing the final textual presentation.