Posted by: Reuters

Morocco is preparing to issue its first sovereign Islamic bond, or sukuk, worth 1 billion dirhams ($105 million) in the coming weeks after adopting a regulatory framework governing sukuk sales, Finance Minister Mohamed Boussaid said on Thursday.

“The legal framework is now prepared for Morocco to issue its first sovereign sukuk in the coming weeks,” Boussaid told Reuters by phone.

Earlier, the cabinet adopted a decree allowing financial authorities to define different types of sovereign sukuk, in line with the opinion of Morocco’s council of Muslim scholars, government spokesman Mustapha El Khalfi told reporters.

Long rejected because of concern about Islamist movements, Islamic banks are looked on as a way to boost the liquidity of Morocco’s financial market and attract foreign investors.

Early last year, Morocco’s central bank approved five requests to open Islamic banks and allowed subsidiaries of three French banks to sell Islamic products.

Morocco is the most advanced among its North African neighbours in developing Islamic finance, which avoids interest and pure monetary speculation.

Tunisia and Algeria have also started to explore Islamic banking.

Islamic finance has been growing over the past decade as it broadens its investor base across the Middle East, North Africa, Africa and southeast Asia, tapping into conservative religious clients.

(Reporting by Ahmed Eljechtimi Editing by Aidan Lewis, Larry King)