Indonesia plans to sell two Islamic bonds in H2

JAKARTA - Indonesia's finance ministry plans to sell Islamic bonds in the international and domestic markets in the second half of 2008, a senior official said late on Monday following the approval of new bill on Islamic debt.

Rahmat Waluyanto, the treasury director general at the finance ministry, told reporters that the ministry has assets worth 15 trillion rupiah ($1.63 billion) which can be used to back the sharia-compliant debt.

"We may issue them twice, in the domestic and overseas markets," he said, adding that "for the first one, we might try to issue them domestically."

Indonesian legislators agreed to pass a new bill on Islamic sharia debt late on Monday night, paving the way for the government to sell its first Islamic bond and allowing it to tap a wider array of investors to finance the budget deficit.

Finance Minister Sri Mulyani Indrawati said it might take between one to one-and-a-half months for the ministry to draw up the necessary regulations following the approval of the bill.

Waluyanto said last week that the first sharia-compliant paper from the world's most populous Muslim country could come in August. ($1=9,190 rupiah).