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Egypt’s Lawmakers Approve Sukuk for Islamic Bond Issues

March 19 (Bloomberg) -- Egyptian lawmakers approved the country’s first sukuk law today, paving the way for the government to take part in a market that hit a record $46 billion of debt sales last year.

The law allows the state and its related entities to issue Shariah-compliant debt locally and internationally. Capital gains and coupon payments will be exempt from tax, according to the state-run Middle East News Agency.

Egypt is looking for ways to secure foreign currency as a $4.8 billion loan from the International Monetary Fund remains stalled by political unrest. The country may raise as much as $1 billion by June from sale of its first Islamic bonds, Ahmed El-Naggar, adviser to Finance Minister El-Morsi El-Sayed Hegazi, said last month.

Today’s approval of the law is final, meaning it won’t be sent for further review by Al Azhar, Sunni Islam’s highest authority, state-run news website Ahram Gate reported.

To contact the reporters on this story: Tarek El-Tablawy in Cairo at teltablawy@bloomberg.net; Ahmed A. Namatalla in Cairo at anamatalla@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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