Islamabad- Pakistan's central bank will sell 49.5 billion rupees ($503.8 million) of Islamic bonds, the country's first such issuance in 15 months, with pricing to be set on Wednesday.

The sukuk will inject a much-needed liquidity management tool for the domestic Islamic banking industry. The appetite for local currency sukuk has grown with Islamic banks posting double-digit asset growth, but the government has been unable to match demand, constraining the sector's financing and investment capability.

Since 2008, the central bank has sold 15 local currency sukuk, with the last one being in March 2013, raising 43 billion rupees. The busiest year was 2012, when there were four sukuk raising a combined 163.5 billion rupees.

Such instruments are highly sought by the country's five full-fledged Islamic banks and 15 others offering Islamic finance services. The sukuk help them manage short-term liquidity needs and support their financing activity.

At the auctions for the government's last four sukuk, applications were received for more than double the amount of bonds being sold. Net investments by Pakistan's Islamic banking industry declined by 17.7 percent or 76 billion rupees in the 12-month period ending in March. This was mainly due to a lack of new government issuance of sukuk, the central bank said in its latest Islamic banking bulletin.

The government has not indicated whether it would issue more local currency sukuk this year, although the finance ministry has said it was considering issuing dollar-denominated sukuk.