Monday, February 23, 2009

Indonesia’s domestic sukuk to have 5-yr maturity or more

Indonesia's regular domestic sukuk issues will have a maturity of five years or more, the finance ministry said in a statement on Feb 18. The government expects to finance its higher budget deficit this year by capitalising on demand for Islamic compliant products in the world's most populous Muslim nation, reports Reuters.
The finance ministry has proposed a budget revision to the parliament, including a revision of the budget deficit to 2.6% of gross domestic product from 1%, allowing more room for spending needed to spur economic growth, the Jakarta report said.
"The regular, Shariah compliant bond will be issued with a fixed or floating rate, ijarah saleand-leaseback, with a medium to long term maturity, more than five years," the ministry said. "The denomination may be in rupiah or foreign currency". Indonesia has a huge domestic market for sharia products.

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