The Central Bank of Nigeria (CBN) and a consortium of central banks from Asia, the Middle East and Africa have taken the first step towards developing a cross-border market in Islamic financial instruments by issuing a $490 million sukuk.
Reuters listed current shareholders of the IILM to include central banks of Indonesia, Kuwait, Luxembourg, Malaysia, Mauritius, Nigeria, Qatar, Turkey and the United Arab Emirates, as well as the Jeddah-based Islamic Development Bank. Iran is a member of the IILM but not a shareholder, the three-month Islamic bonds, denominated in the United States dollars was issued by the Malaysia-based International Islamic Liquidity Management Corporation (IILM). Its debut issue was fully subscribed, the IILM said in a statement recently.
Islamic finance, which obeys religious principles such as a ban on interest payments, has grown rapidly since the global financial crisis and is now estimated to have well over $1 trillion of assets around the world, but its expansion has been limited by a shortage of highly liquid, investment-grade financial instruments which Islamic banks can trade to manage their short-term funding needs.