Monetary Authority of Singapore (MAS) said it will develop a facility to issue Singapore dollar-denominated, sovereign-rated ‘sukuks’, or Islamic bonds, to aid financial institutions conducting Shariah-compliant activities in Singapore.

Sukuks will be issued according to the needs of financial institutions in Singapore with Islamic finance operations, and will be priced against Singapore government securities, Heng Swee Keat, managing director at MAS told an Islamic Finance summit in Jordan late Tuesday.

‘This will provide a transparent price discovery mechanism for this new instrument. As the (Singapore dollar) sukuk market grows and deepens in time, it can then develop its own pricing benchmarks,’ Heng said in a statement released in Singapore.

The MAS said it will give further details about the facility in due time.

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