Economy, Business And Markets

Gov’t Plans to Repay $7.5b Debt

Gov’t Plans to Repay $7.5b DebtGov’t Plans to Repay $7.5b Debt

The government has planned to repay its debt to contractors as soon as lawmakers approve a plan of action it sent last month to the parliament, Economy Minister Abbas Akhoundi said on Wednesday.

The plan of action, an 18-month program seeking to help the economy out of recession, is set to be implemented later this month after certain parts of which pass the parliament.

The government debt to contractors amounts to 200 trillion rials ($7.5 billion), one fourth of which is owed by the ministry of economy, Akhoundi said, as reported by Eghtesad News.

The plan of action suggests that the government should pay its debt by issuing Sukuk Ijarah securities -- financial certificates like bonds which comply with the Islamic law. While conventional bonds promise to repay a loan, Sukuk Ijarah constitutes partial ownership in an asset.