- The Ministry of Finance announced that the UAE will be issuing a treasury sukuk valued at Dh1.1 billion ($299 million), denominated in dirham. This move is aimed at expanding the country's funding sources and promoting the development of the Islamic economy. The sukuk will be issued in tranches of two, three, and five years initially, with a 10-year sukuk to follow at a later date.
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In the previous month, the UAE garnered Dh1.1 billion from the issuance of treasury bonds. The deal consisted of two tranches and was offered through six primary dealers. The two-year and three-year tranches, each worth Dh550 million, received significant interest from investors, with bids totaling Dh5.51 billion.
Why it matters
According to the Ministry of Finance, Mr. Al Hussaini, issuing treasury sukuk in the local currency will help in the development of a bond market denominated in the domestic currency. This move will diversify funding sources, strengthen the local financial and banking sector, and offer secure investment options for both domestic and foreign investors. The recent decision will also increase the competitiveness of the local financial markets and enable market participants in the UAE to maintain a unified, transparent, diversified, and sustainable liquidity pool in dirhams, as stated by Khaled Balama, the Governor of the Central Bank of the UAE.
