The government sold 36.2 trillion rials ($121 million) bonds in the latest weekly auction on Tuesday.
It was the biggest bond sale during the 13 auctions held weekly since the May, the Economy Ministry reported.
Initiated in May 2021, bond sale is part of the government’s effort to raise funds for its ballooning deficits and banks, mutual funds and security underwriters are invited to take part.
Unlike poor demand for bonds in previous weeks, the bond sale was welcomed by stock market investors as well as banks and credit institutions, tough the role of the latter two was smaller.
Fixed income investors in the bourse bought 25.9 trillion rials ($86.9m) bonds, including 9.6 trillion rials ($32.2m) in one-year bonds and 16.3 (54.6m) of debt maturing in October 2024.
Like past events, lenders opted for short-term bonds maturing in October 2023.
Despite obligations imposed by the Central Bank of Iran to allocate a percentage of funds for bonds, the share of banks in the bond market has been lower compared to other investors.
The government generated 302 trillion rials ($1 billion) in 13 auctions. Banks and credit institutions accounted for about 38% of the total while capital market investors took the rest.
In addition to bonds, the ministry said that the government sold treasury bills worth 350 trillion rials ($1.17b) since the beginning of fiscal year in March. Treasury bills are underwritten and given to government contractors for unpaid bills.
The ministry said it plans to sell 453 trillion rials ($1.5b) bonds by March 2023. The debt offers are in line with provisions of the 2022-23 budget in which the government is allowed to sell 860 trillion rials ($2.8b) bonds by March 2023.
The government says bond offers covered the budget deficit to some degree and helped avoid borrowing from the CBI that in the past fueled inflation by increased the monetary base.
