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Islamic Bond Yields Grow Over Rising Supply, Weak Demand

Average yield of 19 Islamic Treasury bills reached 27.3% by Saturday’s close, while average YTM for this year’s first quarter (March 21-June 21) was at 22.3%
The IFB debt market, where most of the Islamic bonds are sold, is currently worth over $13 billion.The IFB debt market, where most of the Islamic bonds are sold, is currently worth over $13 billion.

Average yield to maturity in the Iranian debt market has jumped in recent months and is now hovering above 27%.
The uptick is mainly due to lower demand for bonds caused by the growing attraction of parallel markets alongside the government's increased supply of debt.
Last fiscal year (March 2017-18) saw bond yields mostly fluctuating in line with changes in deposit interest rate, yet this fiscal has so far had other markets such as foreign exchange, gold coin and even equities overshadow bonds and safe havens for investors.
Statistics by our sister publication, Donya-e-Eqtesad, show that bond yields have had some of their most pronounced movements in the fourth month of the year, Tir (June 22-July 22). 

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