The government’s bond sale jumped 30% to 28.7 trillion rials ($94 million) in the sixth weekly auction Tuesday held by the Central Bank of Iran.
Bond auctions are held to raise funds for the government’s deficit spending. Banks, non-bank credit institutions, investment funds and institutional investors in the stock market are the main buyers. The CBI holds the sale on behalf of the Economy Ministry.
Three banks took part in the latest auction together putting in bids worth 12.7 trillion rials ($41.6m) for the nearest maturity date and lowest yields.
Retail and institutional buyers bought 16 trillion rials, including 1.2 trillion rials in short-term debt and 14.8 trillion rials in long-term bonds.
The shortest maturity term was 15 months due in September 2023. The Economy Ministry set a maximum 22% for bonds maturing in October 2024. The rate for 15-month maturity was 21.5%.
According to Economy Ministry data, 161 trillion rials ($527m) bonds was has been sold in six auctions starting in May. Lenders accounted for about 40% of the total while capital market investors took 59%.
As per the data, 150 trillion rials ($490m) in treasury bonds have been sold since the beginning of the current fiscal in late March. Treasury bill are underwritten and given to government contractors in lieu of debts.
The CBI will hold the next auction on July 5 and offer 134.7 trillion rials ($441m) in new debt.
As per rules, investors put in bids for a minimum of 500,000 bonds each at par value of 1000 rials ($0.004) via the interbank auction platform managed by the CBI and the trade platform of the Tehran Securities Exchange Technology Management Company.
Debt is offered in line with the provisions of the budget law that allows the government to sell 860 trillion rials ($2.7b) bonds by March 2023.
