Omani government rules out sovereign Sukuk due to budget constraints (By IFN)

Omani government rules out sovereign Sukuk due to budget constraints

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OMAN: The Sultanate of Oman might have started 2013 strong with the launch of its Islamic Banking Regulatory Framework and the establishment of a handful of Islamic windows, but budget constraints on the government’s side has thrown a spanner in the works. The sultanate’s finance minister, Darwish Ismail Al Balushi announced yesterday that there will be no sovereign Sukuk issuances this year due to budget constraints. This contradicts the Central Bank of Oman (CBO)’s plans to issue up to OMR200 million (US$518 million) riyal-denominated sovereign Sukuk on behalf of the government, announced just last month. “As far as the budget is concerned, we have in this year's budget, taken all the anticipated expenditure to sustain the expected growth. We do not see any unexpected expenditure to occur during the year,” said the finance minister during a press conference held in Dubai. He noted that though the government will not tap into the Islamic capital market this year, there might still be interest on the corporate level. In related news, the CBO has granted Islamic banks a one-year window allowing the relaxation of rules on the amount of foreign assets which they can hold, to give time for Islamic financial instruments to be developed in the country.