الرئيسية
ld mark new tack by debt-wary government
* No need for government to raise budget funds
* But sukuk could help to absorb excess liquidity
* Could also stimulate corporate bond issuance
* Saudi banks will need liquid instruments for Basel III
DUBAI, Dec 13 (Reuters) - A proposed Islamic bond
issue by Saudi Arabia is important not so much because it would
raise money for the country -- the kingdom does not need the
cash -- but because it could serve important monetary policy
goals.
By making the first substantial issue of government debt for
several years, authorities could pave the way for more issues if
they chose. These could become a useful means to soak up funds
from banks and prevent inflationary pressure from rising.
Also, the issue could help Saudi corporations sell bonds by
creating a new sovereign pricing benchmark. More bond issues by
companies would reduce their reliance on bank loans at a time
when the global financial crisis is making foreign banks more
wary about lending.
The Saudi Arabian Monetary Agency (SAMA) is talking with
local and international banks with operations in the kingdom
about issuing a riyal-denominated sukuk as early as in the first
quarter of 2012, banking sources told Reuters.
* No need for government to raise budget funds
* But sukuk could help to absorb excess liquidity
* Could also stimulate corporate bond issuance
* Saudi banks will need liquid instruments for Basel III
DUBAI, Dec 13 (Reuters) - A proposed Islamic bond
issue by Saudi Arabia is important not so much because it would
raise money for the country -- the kingdom does not need the
cash -- but because it could serve important monetary policy
goals.
By making the first substantial issue of government debt for
several years, authorities could pave the way for more issues if
they chose. These could become a useful means to soak up funds
from banks and prevent inflationary pressure from rising.
Also, the issue could help Saudi corporations sell bonds by
creating a new sovereign pricing benchmark. More bond issues by
companies would reduce their reliance on bank loans at a time
when the global financial crisis is making foreign banks more
wary about lending.
The Saudi Arabian Monetary Agency (SAMA) is talking with
local and international banks with operations in the kingdom
about issuing a riyal-denominated sukuk as early as in the first
quarter of 2012, banking sources told Reuters.