The UAE Ministry of Finance (MoF), acting as the issuer and in partnership with the Central Bank of the UAE (CBUAE) as the issuing and payment agent, has announced the successful conclusion of the July 2025 auction for the UAE Dirham-denominated Islamic Treasury Sukuk (T-Sukuk) totaling AED1.1 billion.
This issuance is part of the T-Sukuk issuance program for the year 2025, as detailed on the MoF’s official website.
The auction drew strong interest from eight primary dealers across both tranches maturing in August 2028 and May 2030. The total bids received reached AED5.35 billion ($1.46 billion), indicating an oversubscription of nearly five times and highlighting the robust confidence of investors in the UAE’s creditworthiness and Islamic finance framework.
The auction results showcased competitive, market-driven pricing with a Yield to Maturity (YTM) of 3.88 percent for the August 2028 tranche and 3.95 percent for the May 2030 tranche, which are comparable to US Treasuries at the time of issuance.
The Islamic T-Sukuk program plays a crucial role in supporting the development of the UAE’s dirham-denominated yield curve, providing secure investment instruments for a diverse range of investors.
Additionally, it strengthens the local debt capital market, contributes to the advancement of the broader investment landscape, and supports the UAE’s long-term economic sustainability and growth objectives.
UAE’s Islamic finance growth
As of mid-2025, the UAE continues to strengthen its position as a leading hub for Islamic finance globally. The Islamic finance sector in the UAE is projected to grow at a compound annual growth rate (CAGR) of approximately 7 percent over the next five years, supported by strong regulatory frameworks and growing investor appetite for Sharia-compliant products. According to the International Islamic Financial Market (IIFM), global Sukuk issuance reached over USD 170 billion in 2024, and the UAE remains a key contributor to this market alongside countries like Saudi Arabia and Malaysia. The Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) further enhance the UAE’s status by offering robust legal and regulatory environments tailored for Islamic finance.
The Central Bank of the UAE’s quarterly reports confirm that the local market’s liquidity and investor participation remain resilient, driven by a balanced mix of institutional investors, sovereign wealth funds such as the Abu Dhabi Investment Authority (ADIA), and regional banks. Furthermore, the UAE government’s strategic initiatives, including Vision 2031 and the National Development Strategy, emphasize sustainable growth, fiscal consolidation, and innovation—key drivers supporting increased issuance of Sharia-compliant debt instruments like Sukuk. Recent data from the S&P Global Ratings also highlights the UAE’s strong sovereign credit rating at ‘AA’ level, which supports investor confidence in government-issued debt securities.
