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Saturday 20 July 2013

Tunisia wins green light to issue sukuk

TUNIS: Tunisia's parliament has passed a law that will allow the state to issue Islamic bonds, or sukuk, a move that could help narrow a gaping budget deficit and boost foreign currency reserves, which have fallen to critically low levels.
Finance Minister Elyess Fakhfakh told parliament that his ministry planned sometime in November or December to issue a sovereign sukuk to raise $700 million.
The government, led by moderate Islamists, is keen to develop Islamic finance.
A Tunisian sukuk issue could potentially attract large amounts of Islamic-oriented funds from the Gulf.
The bill received 102 votes in favour in the vote in parliament, held in a closed session late on Wednesday.
"Tunisia's financial difficulties require the mobilisation of all resources, including Islamic sukuk," Fakhfakh said.
Tunisia is running a large state budget deficit, which it has projected at about $3.2 billion this year, and political tensions are hurting its ability to finance itself.
The North African country, which has also signed a $1.7bn standby loan agreement with the International Monetary Fund, is struggling with rising inflation and a big external deficit as well as its uncertain political outlook.
Parliamentary finance committee chairman Ferjani Dogman said the sukuk would help diversify Tunisia's funding sources, but were "not aimed at Islamisation of the economy".
(Gulf Daily News / 19 July 2013)

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