“Islamic finance tools may be benefited from in [financing of] in Turkey’s mega projects like bridges, airports, and Kanal Istanbul. These projects are compatible with the Islamic financing structure,” İbrahim Turhan, chairman of Turkey’s stock exchange Borsa Istanbul said yesterday, speaking at the Islamic Finance News Roadshow.
Currently, the Treasury’s sukuk exports have outpaced $5 billion, while the private sector has exported more than $1.5 billion.
During the ceremony, Bank Asya said it was planning to export at least 125 million Turkish Liras of additional sukuk before the year ended, while Albaraka Türk said it was mulling exporting over $200 million worth of sukuk within the last quarter or at the beginning of next year.
In the past 10 years, the non-interest finance sector grew around 15 percent and the number of countries in which financial bodies operating in compliance with Islamic finance rules could be found has surpassed 70, Ertaş stressed. “It’s expected to exceed $1.9 trillion by the end of this year,” he said.
Islamic finance has been sublimated as a safe haven during the financial crisis that sparked skepticism towards interest-oriented finance.
According to the chief regulator, these Islamic-compliant tools were “not only valuable because they are religious or virtuous,” but they were also “alternative products leaning on a strong financial basis.”
Non-interest financial tools are accorded a great importance in Turkey’s bid to make Istanbul a global financial center as well. “We see that there is a substantial saving surplus in our neighboring Gulf country friends, and in Asia, and these funds prefer non-interest financial tolls, in which they can invest safely,” Ertaş said.
BIST Chairman Turhan also announced that they are planning to open a research and development center for the Islamic financing studies, with the support of the Treasury and World Bank.
In February the government expanded the utilization of Islamic financial tools. It introduced new regulations opening the way for Islamic banks to found non-interest pension funds and most recently enabling them to invest private pension funds in non-interest financial instruments.
“As of today the investors of these kinds of [non-interest] funds have surpassed 400,000, while the fund amount reached above $175 million,” Ertaş has said during the same event.