Government bond sale rebounded this week as 132.5 trillion rials ($490 million) in debt was sold to banks, securities underwriters and equity market investors.
As per the data released by the Central Bank of Iran, the major buyers were retail and institutional investors in the stock market who bought 68.2 trillion rials ($252m).
Other buyers were six banks and credit institutions that put in bids worth 43.4 trillion rials ($160m) at the interbank bond auction platform.
The remaining debt worth 30 trillion rials ($111m) was bought by securities underwriters, the CBI said.
The revival came after disappointing performance in the past several weeks spurred concern about ramifications of the deepening budget deficits and how the government could plug he deficit holes.
Bond sale this time around accounted for 40% of the total 320 trillion rials ($1.2 billion) worth of bonds sold in 17 weekly auctions since May 2020, creating some relief for funding the government budget deficit in a “noninflationary manner”.
Estimates by the Persian-language economic website, Eqtesad News, indicate that the government needs to secure at least 1,000 trillion rials ($3.7b) from bonds in the rest of the fiscal year (ends March 2021) to be able to pay its bills.
Investors disregarded bond offers for several weeks for reasons such as low yields and long maturity dates plus “buyers’ troubles to cash the securities in the secondary market,” according to the CBI.
Earlier the CBI Governor Akbar Komijani underscored the need to make the debt market more attractive to investors. He expressed concern about methods of funding the government budget, stressing that selling bonds must gain pace.
Without going into details, Komijani on Tuesday said that the “Economy Ministry has agreed to adjust bonds yields”.
Opening a primary interbank market for bond auctions is a CBI initiative launched in May 2020 to help the government raise funds for budgetary needs as it struggles with ballooning deficits due to the US blockade on oil export -- the lifeline of the economy.
In fiscal 2020-21 the government held 42 bond auctions and generated 1,257 trillion rials ($4.6b).
