CAIRO Jan 16 Egypt has approved a draft law to
allow sovereign Islamic bonds, the country's finance minister
said on Wednesday, as the government searches for new ways to
finance an unsustainable budget deficit.
The Islamist-led administration had amended the original
draft of the law following criticism from religious scholars.
The legislation still needs to be approved by the upper house of
parliament, where Egypt's ruling Islamists hold a clear
"The cabinet today agreed to the draft sukuk law," minister
Al-Mursi Al-Sayed Hegazy told reporters.
He said demand would be strong for the bonds, known as
sukuk, and that in recent days the Islamic Development Bank, a
multilateral institution, had said it could be ready to buy
around $6 billion of them.
Egypt has never issued a sovereign sukuk. An international
issue would help the government replenish dangerously low
The Muslim Brotherhood, which controls Egypt's presidency,
also wants to promote sukuk for religious reasons.
Hegazy, an economist who is an expert on Islamic finance,
said he expected the new law to attract fresh investment to
"I imagine that Egypt, with its great human and material
resources, will attract many investors," said Hegazy, who took
up his post as finance minister earlier this month.