INDONESIA DELAYS SUKUK ISSUANCE

Indonesia’s finance ministry has reportedly postponed its first dollar Islamic bonds, or sukuk, to November from October due to lower business activities during the Muslim fasting month of Ramadan. The government had said it expected to sell dollar sukuk to raise as much as $1 billion in October and rupiah Islamic bonds equivalent of about…

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June 21, 2022

Indonesia’s finance ministry has reportedly postponed its first dollar Islamic bonds, or sukuk, to November from October due to lower business activities during the Muslim fasting month of Ramadan. The government had said it expected to sell dollar sukuk to raise as much as $1 billion in October and rupiah Islamic bonds equivalent of about $1 billion in August to help plug the budget deficit. Sukuk comply with sharia, or Islamic law, which bans lending on interest. Bond holders are instead paid income derived from assets such as rent from property or commercial transactions such as trade in goods and services. The government of the world’s most populous Muslim nation is finding it increasingly costly to sell conventional bonds because of rising inflation and hopes to capitalise on growing demand for sukuk. The finance ministry also published a timetable of rupiah sukuk expected to be issued in late August.