There remain challenges, such as the continuing illiquidity in local bond markets that will be accentuated by the demand for yielding assets that will make sukuk a hold-to-maturity type of asset for the Islamic banks. In addition, the lack of tawarruq as a liquidity management tool could lead Islamic banks and windows to hold more cash on their balance sheet than they otherwise would. However, despite these challenges, the roll-out of Islamic banking in Oman has so far proceeded relatively smoothly.
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