The Turkish government will press ahead with its first issue of Islamic bonds this year and the planned sale should encourage private companies to do likewise and boost Istanbul's role as a financial centre, Deputy Prime Minister Ali Babacan said on Tuesday.
The government had said previously it could issue a sukuk in 2012, overcoming sensitivities about Islamic finance in the secular republic as it seeks to tap a rich pool of investors flush with oil money.
Finance Minister Mehmet Simsek told the press conference with Babacan on Tuesday that the government would also ease taxes on sukuk issues to encourage investment.
"Turkey should participate in the sukuk issue market, and the Treasury's sukuk issues will pave the way for those of the private sector," Babacan said.
"Strengthening the sukuk market is also important in making Istanbul a global finance center, and the sukuk certificates will be traded on the Istanbul Stock Exchange," he added.
Plans for a sovereign sukuk issue from an economy regarded as one of the most progressive and successful in the Muslim world signals intent on Turkey's part to play a bigger role in Islamic finance.
The size of the global sukuk market is estimated at more than $100 billion.
Simsek told the news conference his ministry was working on easing taxes on the Treasury's sukuk issue to make the bond more attractive for possible investors, as he said it already does with eurobond issues.
The two ministers did not elaborate on the size of the planned sukuk issue, but both reiterated that it will be held this year.
"Market conditions will determine the amount of the issue, and the sukuk may be lira-, dollar- or euro-denominated and will attract investors from both Turkey and abroad," Babacan said.