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Wednesday, 9 April 2008

Indonesian government to issue 15 trillion rupiah worth of sharia bonds


(8 Apr 08)

JAKARTA (Thomson Financial) - The Indonesian government is planning to issue later this year its first sharia bonds, or bonds that comply with Islamic law, to help cover the state budget deficit, a finance ministry official said Tuesday.

"The value of sharia bonds to be issued will be around 15 trillion rupiah ($1.63 billion), in line with underlying assets that have been set aside by the government," said Rahmat Waluyanto, the ministry's director-general of debt management.

Waluyanto said half of the sharia bonds would be issued domestically and the rest offered in the form of sovereign Islamic bonds, known as sukuk, in the international market.

The government said earlier that the bond issue was meant to meet growing demand for sukuk, particularly from Middle East investors.

The lower house of parliament is scheduled to pass a bill on sharia bonds Thursday. The enactment of the law will provide a legal basis for the government to issue such instruments.

Finance Minister Sri Mulyani Indrawati has said his ministry will shortly issue follow-up regulations that will govern the technical aspects of issuing sharia bonds.

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