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Investors Not Buying Gov’t Bonds

Investors Not Buying Gov’t Bonds Investors Not Buying Gov’t Bonds

The weekly government bond auction held by the Central Bank of Iran was again received coldly by investors for the fourth time in a row as no banks and credit institutions put in bids. 
The bond offer was also not well-received by the stock market as only 395.2 billion rials ($1.4m) was bought   outside the auction process. 
A per an earlier announcement by the CBI, 65 trillion rials ($232m) in bonds was on offer, the CBI website said.
Struggling to raise funds to compensate deepening budget deficits, the government launched a series of auctions in May to sell Islamic bonds to banks, investment companies and investors.
Bond sales have declined sharply in the past four weeks. Data of the weekly auctions indicate that the government has been able to generate no more than 17 trillion rials via bond sale in the past four weeks. Prior to that, average sale per week generated 40 trillion rials ($140m).
However, the deep plunge notwithstanding, the government has so far generated almost 710 trillion rials ($2.4b) in 21 weekly bond auctions. 
Grappling with unprecedented budgetary challenges, the Rouhani  administration has pinned high hopes on the debt market.  Experts say that the government needs a minimum 50 trillion rials every week to shore up its finances.
High inflation expectation and unattractive yields on bonds, experts say, are the main factors contributing to the slack interest in investing in fixed-income assets. The CBI says it will not be deterred and next Tuesday (Oct 27) offer 64 trillion rials on the debt market. 

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