Qatar Central Bank (QCB) has issued government Ijara Sukuk totaling QAR 2.3 billion, equivalent to approximately $632.2 million, on behalf of the Ministry of Finance, highlighting the strength and stability of Qatar’s sovereign debt market and its focus on Shariah-compliant financing instruments. The issuance reflects continued efforts to diversify funding sources while supporting the local banking and financial sector.
The Sukuk issuance was carried out through two tap tranches added to existing series, a strategy aimed at increasing liquidity and deepening the domestic debt market. The first tranche amounted to QAR 1.15 billion with a maturity of three years, while the second tranche, also valued at QAR 1.15 billion, carries a five-year maturity. Both tranches were issued at a yield of 4.150 percent.
The equal yields across the three- and five-year tenors indicate a flattening yield curve in the domestic riyal market, a sign of stable inflation expectations and balanced liquidity conditions within Qatar’s banking system.
Investor demand for the issuance was exceptionally strong. Total bids reached approximately QAR 7 billion, or about $1.92 billion, resulting in an oversubscription of more than three times the offered amount. This robust demand underscores strong confidence among local and regional institutional investors, particularly Islamic banks and investment funds.
Despite global interest rate volatility, investors viewed the 4.150 percent yield as an attractive risk-adjusted return for high-quality sovereign assets. The outcome highlights Qatar’s continued ability to attract capital in competitive market conditions.
Ijara Sukuk are Shariah-compliant instruments structured around lease agreements rather than interest-bearing debt. Investors hold an ownership interest in underlying government assets, which are leased back to the issuer, generating rental income as returns. This structure allows Qatar to broaden its investor base while remaining compliant with Islamic finance principles.
Beyond diversification of funding sources, the issuance supports local Islamic banks by providing high-quality liquid assets and establishes a benchmark for corporate Sukuk issuances, facilitating more efficient private-sector financing.
The issuance comes amid a positive medium-term economic outlook for Qatar. Real GDP growth is projected to average around 5 percent between 2026 and 2028, driven by the expansion of the North Field LNG project and the continued growth of the non-hydrocarbon sector, which now contributes more than 60 percent of national GDP.
QCB’s proactive management of the domestic debt market continues to support a resilient and well-capitalized financial system. By issuing sovereign debt in local currency, Qatar also reduces foreign exchange risks while strengthening the development of its local capital market.