News Column

Pakistan to auction local currency sukuk

June 19, 2014

Pakistan's central bank will auction a three-year local currency sukuk, or Islamic bond, more than a year after it last issued such an instrument, adding a much needed liquidity management tool for domestic Islamic banks.

The central bank did not give a target size for the sukuk, which will be backed by motorway assets in Punjab province and use an ijara structure, a shariah-compliant sale and lease-back contract. No date for the sale was announced. Pakistan issued a Rs43 billion ($438 million) three-year sukuk in March last year, using a similar structure. A local currency sukuk would be welcomed by the country's five full-fledged Islamic banks and 15 others.

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Source: Khaleej Times (United Arab Emirates)

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