Government bonds found no buyers in the weekly auction for the second week in a row.
Out of a total of 58 trillion rials ($207 million) bonds on offer on Tuesday only 1 trillion rials ($3.5m) were sold to one bank, the Central Bank of Iran said on its website.
Similar to the week before, retail and institutional investors in the bourse, who usually are the main buyers of government bonds, stayed put.
Their role in the debt market has declined sharply after stock market investors voiced concern that excessive purchase of bonds by institutional investors had drained liquidity out of the stock market.
Fixed income investment funds have allocated a bigger segment of their asset portfolios to bonds in recent months.
Bond sale is part of the government’s policy to try and raise funds for huge budgetary needs as it struggles with bigger deficits due to the 2018 US economic sanctions that have hurt the economy hared, especially crude oil exports.
The CBI on behalf of the government has held 29 bond auctions since May 2021 and generated 660 trillion rials ($2.4 billion).
Stock market investors bought 70% of the total bonds during the period and banks and credit institutions took the balance.
Apart from bonds, the government has generated 810 trillion rials ($2.7b) from treasury bills in the present fiscal year.
Provisions of 2022-23 budget say that the government intends to sell bonds worth 880 trillion rials ($3.1b).
The figure is 445 trillion rials ($1.5b) or 33% lower than the 1,325 trillion rials ($4.5b) mentioned in the present fiscal year that ends in March.
