Government bonds worth 15.6 trillion rials ($60 million) were sold to banks, investment funds and buyers at the stock market during the weekly auction held by the Central Bank of Iran.
Buyers were five banks and credit institutions with 12.2 trillion rials ($48.8 million), the CBI website said. Outside the auction, institutional and retail traders bought the remaining 3.3 trillion rials ($13.2m) at the equity market.
Starting in May, the auction is a government initiative to help plug its deepening budget deficits. The auctions were relatively successful in the first several rounds but plunged sharply with the start of autumn.
Bbond sold this week was 5% lower than in the previous week. Observers say diminishing investor interest in recent weeks could be partly ascribed to low yields the government offers.
Data compiled by the Persian-language economic website eghtesadnews suggest that the Economy Minstry this week offered the lowest yield on bonds compared to the past 12 auctions.
The average primary market yield was 20.64% indicating a 0.44% decline compared to the previous week’s offer. The CBI has put up 108 trillion rials ($423m) for next week’s auction on January 13.
Bonds sold this week put total government earnings from 32 auctions to more than 920 trillion rials ($3.68 billion) with 56% coming from banks and investment funds and 44% from investors in the bourse.
The government earlier announced that it plans to earn 1,250 trillion rials ($5 billion) via bond sales. Therefore, it has to sell an average 32 trillion rials in bonds in the remaining ten weeks by the end of the current fiscal year in March.
Addressing a Cabinet meeting last week, President Hassan Rouhani pointed to the increasing role and significance of bonds in funding the economy hurting from a deep decline in oil revenues.
