The Governor of the Central Bank of Iran Ali Salehabadi said the CBI will soon issue forex-backed bonds to fund development projects.
CBI officials have recently spoken about plans to issue forex bonds but have not provided details.
In a talk with IRNA, Salehabadi shed light on the rare move. “The bonds by nature are project-based, i.e. they will be used to finance a project that generate forex revenue,” he was quoted as saying.
Foreign currency-denominated bonds are debt instruments issued in a currency other than the national currency of a country.
The target projects must potentially achieve high returns in order to be able to reimburse the principal and interest of the bonds, the CBI boss said.
Earlier he said companies that generate forex and are listed in stock market will be allowed to issue currency-denominated bonds.
Economists and market observers link the move to CBI efforts to control the chaotic currency market in the hope of dissuading investors from the forex market that has hardly seen a semblance of stability for years.
The CBI also hopes to attract holders of foreign currency, usually kept in cash in homes to protect life savings from runaway inflation and the apparently unending devaluation of the rial. The regulator has pledged to settle the principal and interest of forex bonds.
