Singapore - Singapore's central bank on Monday launched a 200-million-Singapore-dollar (134-million-US-dollar) Islamic bond programme to promote the growth of Islamic finance in the city-state.

The bonds, called sukuk, are the first to be offered in a local currency by a non-Muslim-majority country.

"This sukuk is the sharia-compliant equivalent of Singapore government securities and is of the highest credit standing," said Heng Swee Keat, managing director of the Monetary Authority of Singapore, its central bank.

The bonds are to be treated and regulated like government securities and are to be issued according to the demand received from investors, Heng said.

"The size, maturity and pricing of each issuance will be determined in line with the investor requirements and the prevailing market conditions," said V Shankar of Standard Chartered Bank, which is leading the management of the sukuk programme with the Islamic Bank of Asia. "Thus, it will be a demand-driven issuance to satisfy the needs of the investors."

The Islamic Bank of Asia said it would place the first order for the bonds. (dpa)