Abu dhabi: Indonesia's Financial Services Authority (OJK) and stock exchange operators launched a Sharia-compliant Gold Exchange-Traded Fund (ETF) on Monday, aiming to expand the nation's bullion market and deepen capital sector liquidity, Indonesian news agency (ANTARA) reported.

According to Emirates News Agency, the newly introduced Gold ETF allows investors to gain exposure to gold price movements on the Indonesia Stock Exchange (IDX) without physically storing the precious metal. The instrument adheres to Islamic financial principles under a fatwa issued by the National Sharia Council of the Indonesian Ulema Council (DSN-MUI).

Indonesian Central Securities Depository (KSEI) President Director Samsul Hidayat said the product integrates physical gold as an underlying asset, records digital ownership via Electronic Gold Receipts (EGR) at KSEI, and facilitates participation unit trading on the IDX. "Today's launch of the Gold ETF symbolizes our hope that the capital market will thrive and contribute to Golden Indonesia 2045," Hidayat said, adding that the initiative bridges physical commodities with traditional capital markets to diversify local investment options.

Deputy Finance Minister Juda Agung assured investors that the newly introduced instrument is fully collateralized by tangible assets. He noted that global demand for the asset class has surged, with worldwide Gold ETF assets under management (AUM) reaching US$559 billion and holding over 4,025 tonnes of gold by 2025.