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EghtesadOnline: The government sold 12.9 trillion rials ($46 million) bonds at the weekly auction on Tuesday held by the Central Bank of Iran.

A bank was the sole buyer in the interbank market and like most previous auctions stock market investors made a bigger contribution to the sale. 

The bank bought bonds worth 4.5 trillion rials and the balance was taken by equity traders and financial institutions, namely fixed income funds, according to data seen on the CBI website. 

Bond sale is part of the government’s policy to raise funds for budgetary needs as it struggles with a ballooning deficit due to the US sanctions on the oil export industry – the lifeline of the economy.

On behalf of the government the CBI has held 27 bond auctions since May 2021 and generated 660 trillion rials ($2.3 billion). 

Stock market investors bought 70% of the total debt while banks and credit institutions took the rest.  

In the next auction set for Jan.18, the CBI said it would offer debt to the tune of 58.6 trillion ($210m).   

Bond sale has reportedly helped cover the budget deficit to a considerable degree and helped avoid borrowing from the CBI that in the past fueled inflation by increasing the monetary base.

The Economy Ministry last week said bond income in its entirety was used to reimburse the principal and interest of matured bonds sold in the past. 

In a press release posted on its new website, the ministry said the government paid 528.16 trillion rials ($1.8b) and 275.95 trillion rials ($950m) to settle the principal and interest of debts sold in the past. The amount was 156.7 trillion rials ($540m) higher than the total debt sold so far this year. 


Iran Bonds