Economists have mixed reactions regarding the Egyptian government’s plan to issue dollar-dominated and euro-dominated Islamic bonds (sukuk) over the next fiscal year, which began July 1, with the aim of diversifying sources of financing and giving a push to economic stimulation efforts.

In press statements to Bloomberg on June 27, Finance Minister Mohamed Maait made the announcement, expecting that the issuance of the Sharia-compliant bonds would attract huge demand, as it enjoys a large market. Maait further said that the issuance of these bonds only requires a legal framework, adding that the government would introduce amendments to the existing law or draft a new one.

Ahmed Koura, a veteran banker and the former head of Al Watany Bank of Egypt, said that the issuance of Islamic bonds would attract capital mainly from Muslim markets in the Middle East and Southeast Asia.

“The government is trying to attract as many investors as possible and diversify its funding options in order to fill the gap in its budget deficit, reinvigorate financial markets and carry out several economic, investment and infrastructure projects,” Koura told Al-Monitor.