Islamic Sukuk and Its Role in Supporting the Budget Deficit: Case Study on The Central Bank in The Jordan

Abstract

Market Sukuk (Arabic word meaning bond) grown very large in the recent period, which is similar to conventional Eurobonds, Islamic Sukuk increased in the current period, and it is a good substitute for conventional bonds, but in Jordan instruments Islamic Market still suffers a lot of obstacles, though that Jordan suffers greatly from debt and increasing annually, but there is no practical step by the central bank to issue instruments Islamic alternative for the issuance of government bonds.

The purpose of the study to investigate the obstacles that prevented the issuance of central bank for those instruments, and the study approach is the Data was collected by two methods first, primary data was collected using questionnaire, second, secondary data was collected using literature.

The study found that  there are obstacles prevented the issuance of central bank  the instruments Islamic including: regulatory risk, and liquidity risk, and regulatory obstacles, and the cost of issuance, and the research has recommended that: the central bank should prepare the laws to issuance Islamic sukuk, and the central bank should encourage the Islamic banks to issuance Islamic sukuk.