The Islamic Development Bank, or IDB, is to issue a $500 million sukuk, or Islamic bond, in a few weeks, according to its president Dr Ahmed Mohammed Ali.
Ali told a Press conference in the bank's headquarters here on Wednesday that it is the first issue in the $6 billion sukuks planned for a period of five years. The media meeting was also attended by chief economist Dr Izzat Ali.
Ali explained that the objective of the sukuk is to collect funds from the international market place to support member countries affected by the global financial crisis. The crisis not only poses a challenge but also throws up opportunities, which the bank is determined and competent to explore and offer to the member countries.
He said that the bank is well-placed, strong and stable to meet with success, and added that all ratings agencies — Fitch, Standard & Poor's and Moody's — have given an AAA rating to IDB.
The recently concluded 34th annual meeting of the IDB Group Board of Governors in Ashgabat, Turkmenistan had noted that the performance of the IDB Group to assist and mitigate the adverse impact of the global food and economic crisis on member countries has been commendable.
It urged the Group to scale up support to meet evolving requests of member countries for assistance in the development of Islamic financial services industry, which will provide "a critical anchor of stability to our domestic financial sector."
The Board welcomed the IDB-led initiative to establish a "Task Force on Islamic Finance and Global Financial Stability" in January, whose work is aimed at contributing to the reform process of the global financial system with a view to enhancing its resilience and preventing future recurrence. It urged the Central Banks and the national investment authorities to strongly support and participate in the resource mobilisation programmes of the IDB Group.
Ali said that Saudi Arabia, Turkey and Indonesia had played a significant role in setting out a comprehensive reform agenda for the global financial system during the G-20 Summit held on April 2.
He said that the Bank was promoting Islamic banking and finance not as a competitor to conventional banking or as a substitute to it but as a viable alternative in the present world financial turmoil.
According to him, Islamic banking has proved its worth and such countries as France are opening doors to Islamic banking.
He said that Muslim countries should place their funds in such productive and growing sectors as infrastructure, and agriculture.
About the Bank's programme to support poor Muslim countries hit by rising prices of essential commodities, Ali said that an amount of $1.5 billion has already been allocated for the purpose. "Our Bank will also support member countries to increase their agricultural production. We are ready to support any project aimed at development of member countries," he added.
He said 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.
According to Izzat, it was difficult to predict when the recovery will take place, but it will most likely be "L-shaped."
From Khaleej Times
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