Islamic Dev't Bank to Issue Rupiah-Denominated Sharia Bonds

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JAKARTA, May 15 Asia Pulse - The Islamic Development Bank (IDB) has promised to issue rupiah-denominated sharia bonds to finance its projects in Indonesia following the enactment of law on state sharia bonds (SBSN) in the country, an official said.

"I met with the IDB president some time ago. At that time he was waiting for the law on sharia bonds. He told me that soon after the law had been enacted, they would issue rupiah-denominated bonds," Dewo Broto Joko Putranto, director of foreign multilateral funding at the Office of the State Minister for National Development Planning/National Development Planning Board (Bappenas), said here on Wednesday.

The IDB had so far done the same thing in many Organization of Islamic Conference (OIC) member countries. "In Malaysia, they have issued ringgit-denominated sharia bonds," he said.

He said both domestic and foreign investors could bid for the rupiah-denominated sharia bonds. "They could be Middle Eastern investors who now have excessive liquid funds."

Asked about the possibility of Indonesia obtaining program loans from the IDB, he said it was difficult to do so because the bank was facing solvency capital problems.

The government is planning to issue state sharia bonds worth Rp15 trillion this year.

Data from Bappenas show Indonesia has so far obtained project loans from the World Bank, the Asian Development Bank (ADB) and the Japan Bank for International Cooperation (JBIC) as well as from other multilateral creditors, including the IDB.

The IDB's outstanding loans for Indonesia amounted to US$411.14 million for 17 projects as per December 31, 2007.

(ANTARA)

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