Buyers were banks and credit institutions, investment funds as well as institutional and retail investors in the stock market.
As per a press release posted on CBI’s website, five banks put in bids worth 44.5 trillion rials but the Economy Ministry accepted bids worth 25.6 trillion rials ($106m).
Banks bought the bonds at varying yields, the highest being 20%. Bonds worth 7.9 trillion rials were bought at this rate, and 18.9 trillion rials worth of bonds were sold at 18.9%.
Stock market investors bought 8.5 trillion rials at 21%.
The Economy Ministry agreed to pay the highest yield on bonds to other financial institutions, namely investment funds. It agreed to pay 21.5% for 20 trillion rials sold to these funds. This is the highest yield so far.
The government was able to sell 90% of bonds put up for sale at the weekly bond auctions.
Bond auctions help the government plug gaping holes in the fiscal budget by raising money from the interbank market without the need to borrow from the CBI and increase the monetary base.
In 15 rounds of auctions since June, it has generated 667 trillion rials ($2.7 billion) from Islamic bonds at an average 17.98%, according to data published on the economy ministry website shada.ir.
About 62% of bonds have been sold in the market to lenders and the rest to buyers in the bourse.
The Money and Credit Council, the top monetary decision-making body, last month obliged banks to allocate at least 3% of their financial resources to buy government bonds.
The government has said it will carry on with the bond sales throughout the fiscal year that ends next March to balance its budget. It also has plans to issue bonds worth 1,240 trillion rials ($5.4b) – a figure beyond what is forecast in the March 2020-21 budget, according to Mehdi Banani, head of the Debt Management Department of the Economy Ministry.
Banani said the government needs to sell 940 trillion rials ($4.2b) in bonds in the first half the fiscal year, 620 trillion rials ($2.7b) of which is above the figure projected in the national budget.
He has said the government needs to sell another 620 trillion rials before the current fiscal year is out to shore up its finances.