IDB delays short-term sukuk as sector looks for liqudity tools

The Jeddah-based Islamic Development Bank has no immediate plans to issue short-term sukuk (Islamic bonds), leaving it to domestic and regional issuers to meet growing demand for liquidity management tools in the sector. Last year, the IDB said it aimed to issue its first short-term sukuk in 2014, adding to wider efforts to develop high-quality liquid assets (HQLAs) for Islamic banks to use, but at this stage such a programme is not planned. In the meantime, domestic regulators including Bahrain and the United Arab Emirates have expanded their Islamic liquidity tools in recent months. But there are concerns that such tools could be insufficient in times of market stress, when they are needed most.