Bond RMB Sukuk Islamic Offshore China Currency 2026
The market for Islamic finance, particularly Sukuk (Islamic bonds), has seen significant growth in recent years, driven by increasing demand for Sharia-compliant investment products. In 2022, the global Sukuk market reached approximately $600 billion in issuance, with expectations for continued expansion as more countries and companies look to diversify their funding sources. The offshore RMB market has also gained prominence, with the People’s Bank of China reporting a 20% increase in RMB-denominated trade in 2023, indicating a strong appetite for the Chinese currency in international transactions.
1. Malaysia
Malaysia is a leader in the Sukuk market, accounting for over 50% of global Sukuk issuance. In 2022, Malaysia issued approximately $100 billion in Sukuk, reflecting the country’s strong Islamic finance framework.
2. Indonesia
Indonesia ranks second in the Sukuk market, with $20 billion issued in 2022. The government has actively promoted Sukuk as a means to finance infrastructure projects, enhancing its appeal to both domestic and international investors.
3. Saudi Arabia
Saudi Arabia has become an emerging player in the Sukuk space, issuing approximately $15 billion in 2022. The kingdom’s Vision 2030 initiative aims to diversify its economy, and Sukuk is a key financing tool in this transformation.
4. United Arab Emirates
The UAE is a significant hub for Islamic finance, with Sukuk issuance reaching around $10 billion in 2022. The Dubai Islamic Bank has been instrumental in promoting Sukuk products within the region.
5. Qatar
Qatar issued about $9 billion in Sukuk in 2022, leveraging its strong economic performance and investment in infrastructure. The country’s focus on Islamic finance is evident through the Qatar Financial Centre.
6. Turkey
Turkey’s Sukuk market has grown rapidly, with total issuance of approximately $7 billion in 2022. The government has encouraged the use of Sukuk for financing public projects, appealing to both domestic and international investors.
7. Bahrain
Bahrain has a well-established Islamic finance sector, issuing about $6 billion in Sukuk in 2022. The country is known for its regulatory framework that supports Sukuk issuance and attracts foreign investment.
8. Pakistan
Pakistan’s Sukuk issuance reached $5 billion in 2022, as the government seeks to tap into Islamic finance for budgetary support and infrastructure development, enhancing financial inclusivity.
9. Egypt
Egypt’s Sukuk market is emerging, with around $3 billion in issuance in 2022. The government is exploring Sukuk as a financing mechanism for infrastructure projects, driven by growing public interest in Sharia-compliant investments.
10. Oman
Oman issued approximately $2 billion in Sukuk in 2022, utilizing these instruments for budgetary support and to finance ongoing development projects, reflecting a proactive approach to Islamic finance.
11. Bangladesh
Bangladesh’s Sukuk market saw issuance of around $1 billion in 2022 as the government aims to harness Islamic finance to support developmental projects, enhancing the appeal of Sukuk domestically.
12. Nigeria
Nigeria issued approximately $1 billion in Sukuk in 2022, focusing on infrastructure financing. The country is increasingly leveraging Islamic finance to attract investment in various sectors.
13. Morocco
Morocco is developing its Sukuk market, with a modest issuance of around $500 million in 2022. The government is exploring Sukuk as a means to finance public projects while adhering to Islamic principles.
14. Kuwait
Kuwait’s Sukuk issuance reached about $700 million in 2022, backed by strong demand from local investors. The country’s regulatory framework supports the growth of Islamic financial products.
15. Jordan
Jordan has issued approximately $300 million in Sukuk in 2022, focusing on infrastructure and development projects. The country is gradually increasing its participation in the Islamic finance market.
16. Lebanon
Lebanon’s Sukuk market is nascent but growing, with around $200 million in issuance in 2022, primarily driven by government initiatives to diversify funding sources amidst economic challenges.
17. Sri Lanka
Sri Lanka’s Islamic finance sector is expanding, with Sukuk issuance reaching approximately $150 million in 2022. The government is keen to tap into the potential of Sukuk for economic development.
18. South Africa
South Africa has seen a burgeoning Sukuk market, with issuance around $100 million in 2022. The country is promoting Islamic finance as part of its broader economic strategy.
19. Brunei
Brunei has issued Sukuk worth approximately $50 million in 2022, reflecting its commitment to Islamic finance and investment diversification in the region.
20. Afghanistan
Afghanistan’s Sukuk market is still developing, with a nominal issuance of around $20 million in 2022. Efforts are underway to integrate Islamic finance into the national economic framework.
Insights
The Sukuk market is expected to continue its upward trajectory, driven by increased demand for Sharia-compliant investment options and the growing preference for sustainable finance. By 2026, the global Sukuk market is projected to exceed $800 billion, fueled by strong government initiatives in countries like Malaysia and Saudi Arabia. Furthermore, the offshore RMB market is anticipated to grow significantly, with transactions expected to surpass $3 trillion by 2026, illustrating a robust integration of China’s currency in the global finance landscape. This convergence of Sukuk and offshore RMB activity presents lucrative opportunities for investors and issuers alike, reinforcing the importance of Islamic finance in the global economy.
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