Saudi Arabia is planning a sale of Islamic bonds in riyals to local institutions this year to help boost the country’s sukuk market, three people with knowledge of the matter said.

The world’s biggest oil exporter is working on the benchmark-sized issue alongside a plan to sell dollar Islamic bonds in the international market, the people said, asking not to be identified because the information isn’t public. The country hasn’t yet decided which offering to conduct first, they said. A benchmark-sized issue usually raises more than $500 million (Dh1.8 billion).

A sukuk issuance is one of a number of options the country is considering as part deficit financing and developing a domestic debt market, the Finance Ministry said in an emailed response to questions.

The government joins oil giant Saudi Arabian Oil Co. in planning the sale of Islamic bonds in the local market to raise funds. Saudi Aramco, as the company is known, picked four banks including the local unit of HSBC Holdings Plc to advise on its first sale of the securities, likely before the end of June, two people with knowledge of the matter said last month.

Saudi Arabia is forecast to post a budget deficit of 198 billion riyals ($53 billion, Dh193 billion) this year, equal to about 7.7 per cent of economic output. The kingdom raised $17.5 billion from a debut sale of international bonds in October, a record for an emerging market nation, and also completed a syndicated loan in dollars as well as several bond sales to domestic institutions.

The world’s biggest oil exporter plans to raise between $10 billion and $15 billion from international bond markets in 2017 and sell about 70 billion riyals locally, said Mohammad Al Tuwaijri, secretary-general of the Finance Committee at the Royal Court in December.

Six sukuk issues in Saudi Arabia raised $1.8 billion in 2016, five of which were denominated in Saudi riyals, according to data compiled by Bloomberg. The UAE, the second-biggest Arab economy, in comparison raised $7.8 billion from 14 sukuk issues last year, the data shows.