Kuwait’s government plans to issue KD 2 billion ($6.6 billion) of Islamic and conventional bonds to help cover a budget defi cit created by low oil prices, Al Arabiya television quoted unnamed official sources as saying on Monday. The finance ministry has asked the central bank to arrange the issuance, Al Arabiya said. It did not specify the timing beyond saying the issuance would occur this year.
The government has begun drawing down its financial reserves to cover part of the deficit, which it projects at KD 12.2 billion in the current fi scal year that began on April 1. But it also wants to start issuing debt to limit the speed of the drawdown and develop the local financial market.
The KD 2 billion issuance will be divided equally between conventional and Islamic bonds (sukuk), and a total of KD 6 billion of the deficit will eventually be covered by bond issues with the rest covered by reserve drawdowns, Al Arabiya reported.
Finance minister Anas Al-Saleh said last month that Kuwait was talking to its advisers about a potential sovereign bond issue, and was considering both domestic and international debt issues,