The Economy Ministry generated 22.8 trillion rials ($73 million) in the last bond auction Tuesday held by the Central Bank of Iran.
The auctions are held weekly to raise funds for the government’s budget deficits. Banks, non-bank credit institutions, investment funds and institutional investors in the share market are the main buyers.
One bank (not named) was the sole bidder this time in the interbank market putting bid worth 15.8 trillion rials ($51 million), according to data released on the CBI’s website.
Retail and institutional investors in the capital market purchased 7 trillion rials ($22.5m) bonds. The ministry set a maximum 22.29% for bonds maturing in March 2025. The rate for one-year maturity bonds was 21.59%.
As in recent weeks, banks favored bonds with shorter maturity and lower yields whereas institutional investors took debt with higher yields.
According to the ministry data, bonds worth 397.4 trillion rials ($1.26 billion) was sold in 17 auctions that commenced in May.
In addition to bonds, the ministry said that the government sold treasury bills worth 350 trillion rials ($1.11b) since the beginning of fiscal year in March. Treasury bills are underwritten and given to government contractors in lieu of unpaid bills.
The CBI said it will hold the next auction on Sept. 20 and offer 54 trillion rials ($174m) in new debt.
Bond sales are in line with provisions of the 2022-23 budget in which the government is allowed to sell 860 trillion rials ($2.8b) bonds by March 2023.
Weekly bond auctions started in May 2020 when banks and investment funds were instructed to allocate a portion of their resources to buy debt. Later institutional investors and retail traders in the stock market joined.
