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The Turkish government is seeking to bring diversification in the financing sources of the country and for achieving this cause; it is looking forward to expanding the use of Sukuk as the government is working on new regulations to allow wider use of a range of sukuk debt. The Turkish treasury currently only issues Ijara Islamic bonds, which are among the most widely used internationally. However, that type of sukuk also has its limitations. Hence, Ankara is hoping to have legislation to support the use of istisna, murabaha, mudaraba, musharaka and wakala bonds ready in the coming months.
“Ijara has a limit – real estate or leasing revenue is necessary and that is very limiting, maybe not for the Treasury but for the corporates,” an unnamed banking source said. The Turkish Capital Markets Board will complete its work within a couple of months, as it seeks to ensure the new types are in line with internationally accepted standards for Islamic finance.