UK: Government seeks to issue Islamic bonds

Click here: Reuters – Government seeks to issue Islamic bonds

The government said on Wednesday it wanted to become the first Western government to launch Islamic bonds, or sukuk bonds, early next year. Treasury officials will be meeting experts from the City of London to discuss plans to issue government bonds which are compliant with an Islamic ban on interest.

“This is an increasingly global and liquid market, it’s worth 40 billion pounds at the moment (and) we think it could be worth around 250 billion pounds worldwide eventually,” Treasury minister Kitty Ussher told BBC radio. “The potential benefits… are enormous,” she added.

“There are a huge number of international corporates who are issuing these types of securities. And…if we can get to the bottom of how to do it as a UK government, that will be great news for the City of London.” Officials told Reuters on Tuesday there would be a three-month-long consultation into issuing the so-called sukuk bonds, which comply with Islam’s sharia law. They said the aim was to introduce them in the budget next year.

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