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Indonesia's Finance Ministry will sell rupiah-denominated Islamic bonds (known as Sukuk) on Tuesday (26/01). The ministry set an indicative target of IDR 4 trillion (approx. USD $288 million). Proceeds from the bond sale will be used to finance the government's budget deficit. This deficit is estimated to reach 2.15 percent of gross domestic product (GDP) in the 2016 State Budget.
Islamic Bond Auction Tuesday 26 January 2016:
|Islamic Bond Series||Maturity Date
|SPN-S 13072016 (reopening)||13 July 2016|
|PBS006 (reopening)||15 September 2020|
|PBS009 (reopening)||25 January 2018|
|PBS011 (reopening)||15 August 2023|
|PBS012 (new issuance)||15 November 2031|
Source: Indonesian Ministry of Finance
Despite having the world’s largest Muslim population and forming a dynamic emerging economy, Indonesia plays a minor role in the global Islamic banking industry, also known as sharia banking (referring to banking that is in line with Islamic principles). Not only does Indonesia's Islamic finance industry lag far behind Islamic finance industries in other countries that contain a big Islamic community (such as Malaysia and Saudi Arabia), but it also lags far behind the country's domestic conventional banking industry.
Read Analysis: Overview of Indonesia's Islamic Banking Industry