The bond sale boomed this week thanks to contribution of banks and credit institutions but lack of interest from investors in the capital market.
In the 11th auction on Tuesday, 32 trillion rials ($103 million) bonds issued by the government were sold.
Most of the debt was bought by two banks, together putting bids worth 30.5 trillion rials ($98m) or 95% of the total, the Central Bank of Iran reported.
Auctions are held by the CBI to raise funds for the government’s deepening budget deficit. It has held 11 auctions since May.
Banks stayed away for three straight weeks leaving the buying job to institutional investors in the bourse, namely underwriting companies, investment banks and mutual funds.
Role of institutional buyers was trivial in the latest auction as they barely took 1.5 trillion rials ($4.8m) bonds.
However, capital market investors have offered a bigger contribution when taking into account the total bond sale in the past eleven weeks.
According to the Economy Ministry, banks and credit institutions accounted for about 39% of the total bonds and capital market investors 61%.
As per ministry data, treasury bonds worth 300 trillion rials ($967m) have been issued since the beginning of the current fiscal year on March 21. Treasury bills are underwritten and given to government contractors in lieu of unpaid bills.
The CBI said it will hold the next auction on Tuesday to offer 84.7 trillion rials ($273m) bonds.
Bond sales are in line with provisions of the 2022-23 budget law in which the government is allowed to sell 860 trillion rials ($2.7b) bonds by March 2023.
The government has generated 264 trillion rials ($851m) in 11 auctions.
