DUBAI, July 10 (Reuters) - Saudi Arabia will issue a local currency sukuk, or Islamic bond, this month, Saudi finance minister Mohammed al-Jadaan told Al Arabiya News on the sidelines of the G20 summit in Hamburg.

The government is expected to tap both the local and international bond markets this year, depending on the level of demand and the pricing it can obtain, al-Jadaan said in May.

Saudi Arabia issued its first international bond of $17.5 billion last year and a debut international sukuk of $9 billion in April as it seeks to plug a budget deficit caused by lower oil prices.

The minister said in May that the state's budget deficit would be funded mainly through international and local debt, while drawing down the government's reserves would be a last resort.

(Reporting by Davide Barbuscia; editing by Jason Neely) ((Davide.Barbuscia@thomsonreuters.com;))