Bank Indonesia’s recent achievements have positioned Indonesia as the world’s leading issuer of sukuk, outpacing even the Islamic Development Bank (IsDB). With nearly USD 5 billion issued in sukuk, Indonesia has solidified its status in global Islamic finance, revealed by Bank Indonesia Governor Perry Warjiyo during a session at the Indonesia Sharia Economic Festival (ISEF) 2024.
“Indonesia is now the highest sukuk issuer globally, with approximately USD 5 billion, followed closely by IsDB,” Perry stated at the BI, IILM, and IFSB Joint High-Level Seminar and Investor Forum at the Jakarta Convention Center on October 31, 2024.
The IsDB, a multilateral Islamic finance institution, plays a major role in funding infrastructure development aligned with Sharia principles and supports member countries in achieving the Sustainable Development Goals (SDGs).
While Indonesia’s sukuk issuance places it at the forefront, Perry underlined the importance of increasing sukuk offerings further to support the growing local demand for Sharia-compliant investments. According to Perry, sukuk can significantly elevate the Indonesian Islamic finance sector, creating an aligned pathway for both financial growth and Islamic principles.
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In the same address, Perry called for innovation within the Islamic finance landscape, urging a focus on three key Sharia-compliant instruments: sukuk, takaful (Islamic insurance), and waqf (Islamic endowments).
“Product innovation is critical,” Perry emphasized, citing inspiration from historical Islamic governance. “Even Caliph Umar [Umar bin Khattab] led the way in advancing these three aspects, setting a precedent in Islamic values,” he remarked.
These instruments, according to Perry, are vital for promoting progress based on Islamic values. Sukuk offers long-term Sharia-compliant financial securities, while takaful provides an alternative to conventional insurance by following Islamic principles.
Further expanding its reach, Bank Indonesia recently issued USD 424 million in Bank Indonesia Foreign Currency Sukuk (SUVBI), a strategic step aimed at supporting the rupiah’s stability and contributing to the national inflation target of 1.5% to 3.5%.
With such initiatives, Indonesia is well-positioned to bolster its economy and reduce dependency on foreign currency imports, achieving greater resilience within the global financial landscape.