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Islamic Treasury Bills issued over the past week have YTM of close to 20%.
Islamic Treasury Bills issued over the past week have YTM of close to 20%.
Thursday, March 01, 2018

Bonds Catch UP With New Certificates of Deposit in Yield

Thursday, March 01, 2018

Bonds Catch UP With New Certificates of Deposit in Yield

The chain reaction between the anticipated rise in deposit interest rates and the decline in prices of debt securities is in full swing, as highlighted by the issuance of the latest batch of Islamic Treasury Bills on Iran Fara Bourse.
The Central Bank of Iran’s February 17 decision to issue rial certificates of deposit with 20% rates made bonds traded with 15-17% YTMs simply a less attractive investment.
Unsurprisingly, investors flocked to purchase the CDs and 1.01 quadrillion rials ($22.5 billion) of them were sold during the first week of the initiative.
CBI had announced that the 20% CDs–which offer rates 5% higher than the current deposit rates–will be sold for only two weeks, meaning that their sale should cease by Thursday’s close.
 

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03/01/2018
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