Bahar Azadi gold coin bonds offered by the Central Bank of Iran in the stock market will help restore some stability to financial markets based on real assets, a spokesman of the Majlis Economic Commission said.
“Such measures are the norm in many countries. The CBI’s move in this direction is welcome news,” Mehdi Toghyani was quoted by IBENA news agency as saying.
If the people put their trust in the sovereign gold bonds (SGBs) and other bonds they obviously avoid the risk of keeping coins and other valuable items at home, Toghyani said.
“In the case of gold coins, there is a high risk of theft, the fineness of the metal can be damaged due to the conditions in which it is kept. Add to this the high buy/sell cost. This [risk] can be avoided or reduced by opting for bonds. These bonds guarantee that buyers can sell them whenever they wish,” the MP added.
The CBI launched the initial public offer for Bahar Azadi gold coin bonds at the Iran Mercantile Exchange (IME) early this month. The bonds are not taxable and each Iranian can buy up to 100 coins in bonds.
Maturity of the SGBs is six months. Bonds will be liquidated at maturity date based on the average price of gold coin bonds and bank certificate of gold coin deposits on the day of trade. The CBI guarantees repayment.
The benchmark Bahar Azadi gold coin jumped more than 10.19% in the past month, reaching 156.41 million rails on Wednesday.
The Emami gold coin was quoted at 164.653 million rials, up 0.1% the day before. Half Bahar Azadi coin gained 0.34% to buy 89.1 million rials while the Quarter Bahar Azadi coin was up 0.51% at 59 million rials.
As per IME data, CBI gold coin bonds closed Wednesday trade at 163.9 million rials. Contracts were traded at 157.8 million rials for each coin two weeks ago when the CBI launched the scheme
IME is a commodities exchange in Tehran founded in 2006 dealing in farm, industrial and petrochemical products in the spot and futures markets.
The exchange has been offering gold coin futures contracts for years. However, spot trading is still done traditionally in Iran in the market through bureaux de change and independent traders.
Tehran's main bazaar in the south of the city and Ferdowsi Street in the center of the capital are the main hubs for currency and gold trade.
IME also offers gold coin futures and gold funds. Gold futures are standardized, exchange-traded contracts in which the buyer agrees to take delivery, from the seller, a specific quantity of gold at a predetermined price on a future delivery date.
