Government bonds again failed to attract buyers at this week’s auction on Tuesday as both in situational investors in the bourse and banks stayed away.
According to Central Bank of Iran data posted on is website, hardly 461 billion rials were sold from the total 58.6 trillion rials ($218 million) on offer.
One bank was the buyer with retail and institutional investors fully absent. The latter group of investors were the main buyers of bonds in recent weeks. However, fixed income investment funds had increased their debt purchase in the past few months.
Bond sale is part of the government effort to raise funds for growing budgetary needs as it struggles with bigger debt and deficits due to the US economic blockade.
The CBI said that it will repeat the auction next Tuesday and offer 58 trillion rials. On behalf of the government the CBI has held 28 bond auctions since May 2021 and generated 660 trillion rials ($2.4 billion).
Stock market investors bought 70% of the total debt in this period and banks and credit institutions the balance.
Apart from bonds, the government generated 810 trillion rials ($3b) from treasury bills in the present fiscal year that ends in March.
It should be noted that the government cut its income forecast from bonds in the 2022-23 budget.
As per the provisions of the budget published by the Planning and Budget Organization, the government hopes to sell 880 trillion rials ($3.2b) bonds in the next fiscal year.
The amount is 445 trillion rials ($1.6b) or 33% lower than the 1,325 trillion rials ($4.9b) in the present year, IRNA reported.
Treasury bills accounted for 360 trillion rials ($1.3b) or 40% of the government income from selling debt so far. Treasury bills are used as a debt instrument to pay the government’s bills to contractors.
