RIYADH, March 26 (Reuters) - Saudi Arabia's government has decided to suspend its monthly issue of domestic bonds in March, refraining from issuing local currency bonds for a sixth month in a row, the Maaal financial news service reported on Sunday.

Maaal quoted unnamed official sources as saying the government did not want to crowd out private sector financing at a time when national oil giant Saudi Aramco is preparing to make its first issue of riyal-denominated sukuk.

Aramco began meeting with potential sukuk investors last week and its debt sale - perhaps between 3 and 6 billion riyals ($805 million to $1.6 billion) in size - may take place as early as this week, bankers have said.

The government has informed banks of Aramco's launch of its 37.5 billion riyal sukuk issuance programme, Maaal said.

The suspension of this month's domestic government bond issue is possible because higher oil prices have improved government revenues and the government's $17.5 billion issue of international conventional bonds last October was successful, Maaal quoted the sources as saying.

The government is also gearing up for its first offer of U.S. dollar sukuk, which could happen in coming weeks. Maaal quoted the sources as saying this issue might turn out to be the largest-ever sale of sukuk in the international market.

(Reporting by Marwa Rashad; Writing by Andrew Torchia) ((andrew.torchia@thomsonreuters.com; +9715 6681 7277; Reuters Messaging: andrew.torchia.thomsonreuters.com@reuters.net))