Iran’s finance ministry says nearly $4.2 billion of bond have been issued since March to finance government’s budget needs.
The ministry said in a Wednesday statement that total bonds sold mostly to the banks and other public and private entities since the start of the calendar year in March 21 had amounted to 1,135.9 trillion rials.
The statement said that over 70% of the bonds issued by the government over the past six months were Islamic Treasury Bonds which are mostly used to settle payments to non-government creditors.
It said that the Iranian capital market had been responsible for 65% of bonds purchases while the rest had gone to banks and their subsidiaries operating in the interbank market.
It added that weekly bond auctions and other methods, including underwriting contracts involving the Central Bank of Iran, had been used in the government bond issuance program this year.
The statement said that bonds sales had generated a sum of 102.46 trillion rials (nearly $380 million) in the seventieth round of the auctions held during in the week to September 15.
Bond issuance has become a major tool for financing government budget needs in Iran in recent years as the country’s revenues have come under strain both because of the Americans sanctions and also due to lower economic activity caused by the spread of the coronavirus pandemic.
Weekly government bond auctions started under a previous administration in Iran which left office in early August. The new government has indicated it would continue with the extensive bond issuance program to fund its projects and to balance its budget.