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Islamic Development Bank Plans to Issue Sukuk

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Points of Essence:

  • IDB will issue sukuk to source aid funds for crisis affected member countries. For this purpose, a team has been set up to address the impact of the global financial crisis and identify investment projects in Muslim countries. Another team was was also established led by the Malaysian former premier, Tun Dr Mahathir Muhammad to set the new vision for the IDB to better assist Muslim countries and coordinate the cooperation among them for their mutual benefits. Zawya has the report.

JEDDAH – The Islamic Development Bank (IDB) will issue Sukuk (Islamic bonds) in order to collect funds from the international market place so as to support member countries affected by the global financial crisis.

“IDB has set up a committee to study the various aspects and effects of the global financial crisis and identify resources to finance investment projects in Muslim countries,” the Saudi Press Agency (SPA) quoted Ahmed Mohammed Ali, Bank president, as saying on Wednesday.

Ali said that seeking new financial resources was essential, anticipating substantial decline in foreign investment as a result of the global recession. IDB has increased its capital from 8.2 billion to 15 billion Islamic dinars ($25 billion) to meet development requirements of member countries.’ He added that IDB’s deposits and assets had not been affected by the financial crisis. “Our funds are invested in secure Islamic portfolios, which are not affected by speculative business,” he said.

He said a team of experts led by former Malaysian prime minister Mahathir Mohammed has been formed to set out a new vision for the bank. The first task of this team will be to oversee the bank’s administrative reform and devise plans to improve its efficiency.

Ali said the IDB would be developed from a financing organisation to an institution that would spur growth in member countries and strengthen cooperation among them by introducing new economic programmes.

“The bank’s development plan will include introduction of new tools and mechanisms to amass financial resources. We established contacts with a number of financial organisations and funds to finance small and medium enterprises, (SMEs) ,” he said.

© Khaleej Times 2008

Source: http://www.zawya.com

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Written by Suapi Shaffaii

November 28, 2008 at 11:43 pm

Posted in General Issue

Tagged with , ,

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