British Treasury Says It’s Committed to Islamic Bond-Sale Plan
June 27 (Bloomberg) — The U.K. Treasury is committed to selling government bonds that conform to Islamic law, the first western country to sell such securities, Treasury Minister Kitty Ussher said today.
Decisions on tax rates and the underlying assets that would back the securities, known as sukuk, have yet to be made, said Ussher. A “value-for-money assessment” also must be carried out, she said yesterday.
“There’s no doubt in my mind that if we can find a way that works for the taxpayers to do it, the benefit to the City of London in terms if prosperity, jobs and expertise will be enormous,” Ussher said in an interview in London. The City of London is the capital’s financial district.
The U.K. government wants to lure Middle East funds, which are flush with cash after crude oil prices doubled in the past year to over $139 a barrel. The sukuk market will expand by 35 percent to $200 billion in 2010, Moody’s Investors Service said in February.