Economy, Business And Markets

$1b Worth of Islamic T-Bills Issued

$1b Worth of Islamic T-Bills Issued $1b Worth of Islamic T-Bills Issued

Iran's chief treasurer said the Ministry of Economic Affairs and Finance has issued 20 trillion rials ($547.9 million) worth of Islamic Treasury Bills in the past two months.

Rahmatollah Akrami, who is also a deputy economy minister, added that this brings the total value of the electronically issued bonds to twice as much since they were first launched on September 30, IRNA reported.

"We are issuing these bonds to repay government debt to non-government contractors as part of the 2015-16 budget law," he said.

State-owned lender Bank Melli is handling the bond issue, the funds from which will go to the Energy Ministry.

The Islamic T-Bills will yield 24.3% per annum—considerably higher than the 20% cap set by the central bank on one year deposits—given their maturity on 13 March 2016, which is right before the end of the current fiscal year.

This is not the first time the government is using debt financing. Various branches of the government have issued sukuk, Islamic bonds, to finance their development projects, but this is the first time the treasury is doing so, which makes it the first government debt issuance.