The deposit was made on Thursday, Mohammad Aqa Babaee, managing director of the CMSF told the state news agency IRNA.
In September the High Council of Securities and Exchange, the share market regulator, approved a decision based on which 1% of NDFI revenue would be transferred to the CMSF to help mitigate the credit crunch in the bourse.
The decision comes amid a steep downturn in share prices in recent weeks. The once fledging market has lost 60% of its value while key indicators plunge under bruising selloff.
According to Aqa Babaee, the NDFI is supposed to inject money in several phases, the first of which was on Thursday.
"This should help lift the capital market and improve liquidity of shares," he said.
The money is a loan at 12% to be repaid in five years but the maturity data could be extended. The CMSF is responsible for paying the principal amount plus interest.
"The CMSF has asked the NDFI to deposit a bigger amount," he was quoted as saying.
CMSF was created in 2017 to help resolve the credit crunch in the bourse and is mandated to support the stock market and safeguard investors’ interest.
It started with 3 trillion rials ($12 million) borrowed from the NDFI. At birth the NDFI was supposed to inject 1% of its resources into the stabilization fund -- a plan that was in limbo until now.
“The Securities and Exchange Organization has pursued the issue for long,” Hassan Qalibaf-Asl, managing director of the SEO said earlier.
Reservations
The Central Bank of Iran has recently expressed concern about borrowing from the sovereign wealth fund at a time when its assets remain blocked overseas due to the US economic siege.
NDFI's foreign currency reserves are managed by the CBI and the bank says it has to print money to pay the rial equivalent of the NDFI loans.
As per the procedure, the CBI receives the forex from the NDFI and in lieu lends the rial equivalent of the foreign currency. However, because Iran’s currency reserves remain locked in several countries, the CBI says it has no choice but to keep its printing machines running. This policy has obviously hurt the central bank's clout and expanded the monetary base.
Independent of the government, the NDFI was founded to save a portion of forex earnings from oil and gas for future generations.
Like all wealth funds, it lends to both public and private firms in need when national revenues are down, namely during low oil prices.