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Pakistan to sell Islamic bonds worth 49.5 billion rupees

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State Bank of Pakistan will sell Islamic bonds 49.5 billion rupees ($503.8 million) after a gap of 15 months. The sukuk will pour into substantial amount of money, needed for the domestic Islamic banking industry.
The desire for Islamic bonds in Pakistani currency has increased rapidly as Islamic banks experiencing double-digit deposit growth, but the government could not compete with the market demand, proving a barrier in the investment and financing capacity in this sector. In March 2013, the central bank of country had sold its 15th local currency sukuk of worth 43 billion rupees where as the first one was brought to sell in 2008. Four sukuk of combined value of 163.5 billion rupees were sold in 2012. These instruments are highly wanted by five full-fledged Islamic banks and 15 others offering Islamic financing services. During the last four auctions for sukuk, government have experienced applications demanding double amount of the sold sukuk. According to state bank’s bulletin, net investments by Pakistan’s Islamic banking industry declined by 17.7 percent or 76 billion rupees due to a lack inability of central government to issue sukuk. 

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