Government bond sale rebounded this week after buyers shunned offers in the past several months.
Bonds offered in the primary market reached 66.4 trillion rials ($250 million) on Tuesday, the highest in five months.
Underwriting companies were the main buyers with 55 trillion rials ($207m), according to data released by the Central Bank of Iran.
Retail and institutional buyers in the stock market purchased the remaining 11.4 trillion rials ($43m) while banks and credit institutions again stayed away.
The government had generated 29 trillion rials ($109m) in the past four bond auctions.
Bond sale is part of the government’s policy to raise funds for its growing budgetary needs as it struggles with historic deficits due to the 2018 US economic sanctions, rising costs and declining revenue.
On behalf of the government the CBI so far has held 32 weekly bond auctions since May 2021 making 750 trillion rials ($2.8 billion).
Stock market investors bought 74% of the debt in this period while banks and credit institutions accounted for the balance, according to a report seen on the Economy Ministry website, shada.ir.
In a press release Thursday, the ministry said until Feb. 16 it had reimbursed the principal plus interest of bonds worth 899.29 trillion rials ($3.4b) since the beginning of the fiscal year that ends in March.
Of this 587.4 trillion rials ($2.2b) was principal amount of bonds and 311.89 trillion rials ($1.17b) interest.
According to the ministry, the repaid bonds outweighed the total government income from selling new debt in the present fiscal year.
The treasury said it will offer 95 trillion ($360m) bonds in the remaining four weeks of current fiscal year.
The central bank has supported the bond policy to cover the budget deficit saying that it is a safer option than the government(s) borrowing from the CBI as it helps control runaway inflation due to the budget deficits.
Excessive borrowing from the CBI to cover government spending also runs the risk of expanding the monetary base and fuels inflation.
The CBI said 65 trillion rials ($245m) bonds will be offered on Feb.22. The bank acts as broker in the debt market and cannot buy debt in the primary market.
