More than 80% of the bonds offered by the government was bought by underwriting financial institutions in the last weekly auction.
In the absence of banks, underwriters bought 22 trillion rials ($71 million) bonds, accounting for 84% of the total 26.9 trillion rials ($86.5m).
Bond auctions are a regular feature for raising funds for the government’s deficit spending. The main buyers are banks, non-bank credit institutions, investment funds and institutional investors in the stock market. The CBI holds the auctions on behalf of the Economy Ministry.
In the eighth auction on Tuesday, the contribution of banks was zero while the role of retail and institutional investors was a bare minimum.
Available data shows that the government generated 220 trillion rials ($710m) in bonds in eight auctions.
Banks accounted for about 38% of the total purchase while capital market investors took the rest, the Economy Ministry said.
Treasury bonds worth 150 trillion rials ($490m) have been issued since the beginning of the current fiscal in late March. Treasury bills are underwritten and given to government contractors in lieu of unpaid bills.
The CBI said will hold the next auction on July 19 and offer 96 trillion rials ($309m) bonds.
As per the procedures, investors must 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 as well as the trade platform of the Tehran Securities Exchange Technology Management Company.
