The United Arab Emirates (UAE) has reaffirmed its commitment to becoming a global leader in Islamic finance through a series of strategic initiatives and robust growth in key financial indicators.
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National Strategy for Islamic Finance and Halal Industry
On May 6, 2025, the UAE Cabinet approved the “UAE Strategy for Islamic Finance and Halal Industry,” aiming to:
- Expand Islamic Banking Assets: Increase assets from AED 986 billion to AED 2.56 trillion within six years.
- Boost Sukuk Market: Raise the value of listed Islamic sukuk in the UAE to over AED 660 billion by 2031.
- Enhance Halal Exports: Elevate the UAE’s position in the global halal market by increasing local production and exports.
A committee chaired by the Central Bank Governor will oversee the strategy’s execution, ensuring alignment with national economic diversification goals and sustainable finance leadership.
Growth in Islamic Finance Sector
As of September 2024, Islamic banks accounted for 22% of the UAE’s total banking credit, with investments reaching AED 152.3 billion. The sukuk market has also seen significant expansion, with the UAE holding 6.6% of the global sukuk market and ranking fourth globally in all currencies.
Emphasis on Sustainability
The UAE has emerged as a leader in sustainable Islamic finance, with 79% of Islamic banks implementing sustainability strategies, 74% of which have board-level approval. The issuance of green sukuk since 2019 has driven growth in sustainable financing, making the UAE the leading issuer of sustainability sukuk in the region and the second globally.
Launch of Domestic Dirham Islamic Treasury Sukuk (T-Sukuk)
In April 2023, the UAE launched a dirham-denominated Islamic Treasury Sukuk (T-Sukuk) with a benchmark auction size of AED 1.1 billion. This initiative aims to develop the local bond market, diversify financing resources, and support the implementation of the new Dirham Monetary Framework
Strategic Implications
These developments underscore the UAE’s strategic vision to enhance its financial sector’s competitiveness and resilience, offering valuable insights for stakeholders in the financial industry
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