Regional integration requires pooling of capital and liquidity - head of IILM

BAKU, Azerbaijan, June 17. Regional integration requires pooling of capital and liquidity through advanced Islamic capital markets to successfully transform regional initiatives into highly attractive investments, Mohammad Safri Shahul Hamid, CEO of the International Islamic Liquidity Management Corporation (IILM), said during the 14th Private Sector Forum of the Islamic Development Bank Group, Trend's correspondent reports from the event.

"Today, successful regional integration is no longer just about connecting economies. It is about connecting capital and liquidity. Deep, liquid, and interconnected Islamic capital markets are capable of transforming regional initiatives into investment-attractive and viable projects," he said.

According to Hamid, despite the presence of significant volumes of liquidity within IsDB member countries, these resources remain fragmented and concentrated within national markets.

He noted that establishing efficient Islamic capital markets will make it possible to mobilize these funds, boost investor confidence, and reduce the financing costs of infrastructure projects.

"Liquidity is not a convenience, but a necessary condition for investment. It is not a by-product, but a fundamental prerequisite for attracting capital," Hamid emphasized.

The head of IILM cited the experience of Malaysia as an example, where over the past three decades, the Islamic capital market has evolved into one of the key sources of financing for major infrastructure projects through the issuance of sukuk.

According to him, today IILM is the largest issuer of sukuk in the world, accounting for about 36% of the global market. The corporation issues Islamic securities worth approximately $2.5 billion on a monthly basis, providing Islamic banks with high-quality liquid assets for effective liquidity management.

"Even during periods of high volatility in global markets, IILM continued to issue sukuk, providing Islamic banks with the instruments necessary to maintain financial stability," Hamid added.