The Economy Ministry paid the principal and interest on bonds worth 931.4 trillion rials ($2.84 billion) up until October 4.
More than 700 trillion rials ($2.13 billion) was the principal and 231 trillion rials ($650 million) interest, the ministry’s news outlet reported.
The bond money was over and above government income from selling new debt in the present fiscal year. According to ministry data, 505.3 trillion rials ($1.5b) bonds have
been sold in 20 auctions in the calendar year starting in March.
In addition to bonds, the government sold treasury bills worth 350 trillion rials ($1.11b) so far this year. Treasury bills are underwritten and given to government contractors in lieu of unpaid bills.
In the last fiscal year, the government held 36 bond auctions and earned 906 trillion rials ($3b), down 27% from the previous fiscal year.
Debt is offered in line with the provisions of the 2022-23 budget in which the government is allowed to sell 860 trillion rials ($2.8b) bonds by next March.
The government generated 2,289 billion rials ($6.98m) in the 20th bond auction held by the Central Bank of Iran on Tuesday.
Auctions are held by CBI on behalf of the Economy Ministry to raise funds for the government’s budget deficits.
Buyers of government debt usually are banks, non-bank credit institutions, investment funds and institutional investors in the stock market.
In the absence of banks and credit institutions, equity market investors bought 2,289 billion rials ($6.9m) of long-term bonds last week.
The shortest maturity date is June 2024. The Economy Ministry set a maximum 22.29% for bonds maturing in June 2025. The rate for shorter maturity is 21.8%.
Data show that banks prefer debt with shorter maturity and lower yield, while institutional investors go for bonds with higher yields.
The ministry said it will hold the next auction on October 11, and offer 64.52 trillion rials ($198m) in new debt.
Weekly bond auctions started in May 2020 when banks and investment funds were compelled to allocate a part of their resources to buy government bonds. Later, institutional investors and retail traders in the stock market participated.
