Egypt parliament approves Islamic bond law
Egypt’s parliament approved on Tuesday a law allowing the issuance of Islamic bonds which could provide the heavily-indebted government with a new form of finance.
Finance Minister Al-Mursi Al-Sayed Hegazy said last month that Egypt could raise around $10 billion a year from the sukuk market - much more than some analysts expect - but added that it would take at least three months to push through the necessary regulations.
Egypt has never issued a sovereign sukuk. An international issue would help the government replenish its dangerously low foreign currency reserves which dropped to the critical level$13.5 billion in February.
The upper house voted against a demand from the Nour Party, Egypt’s main hardline Islamist group, that the law should be approved by scholars at Al-Azhar, a religious institution which should be consulted on matters related to Islamic law according to a new constitution.
Food supply is a politically-sensitive issue in Egypt, where rising prices are being passed on to struggling consumers and shortages have provoked unrest in the past. Curbs on bread subsidies triggered bread riots in 1977.