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KUALA LUMPUR, Aug 18 (Reuters) - The Malaysia-based International Islamic Liquidity Management Corp (IILM) will lengthen maturities in its Islamic bond programme when it auctions $790 million of sukuk next week, according to a filing with the Malaysian central bank.
The decision to offer a six-month maturity for the first time is a step towards increasing the appeal of IILM sukuk, which were introduced to meet a shortage of liquid, investment-grade instruments which Islamic banks can trade to manage their short-term funding needs. Previously, the IILM issued only three-month paper.
The IILM, a consortium of central banks from Asia, the Middle East and Africa, will offer $400 million of six-month sukuk and $390 million of three-month paper next Monday, the filing said.
The consortium launched its sukuk programme in August last year and currently has $1.35 billion of paper outstanding, including $490 million of three-month sukuk issued in May and maturing this month.
It has said it may eventually expand issuance to $2 billion or more; the programme permits maturities of up to one year.
Shareholders in the IILM are the 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. (Reporting by Al-Zaquan Amer Hamzah; Additional reporting by Bernardo Vizcaino; Editing by Andrew Torchia)