MANAMA, June 9 (Reuters) - Bahrain's central bank and a local Islamic bond trading company said on Monday they had developed an instrument that would increase Islamic financial institutions' access to short-term cash.

Islamic lenders often complain of a lack of short-term liquidity management tools, as conventional repurchase agreements with the central bank are off-limits given Islam's ban on interest.

The Islamic Sukuk Liquidity Instrument (ISLI), developed by the central bank and Bahrain's Liquidity Management Centre (LMC) will allow holders of central bank-issued dinar-denominated ijara sukuk to borrow money against the instrument for one week. ....