Page 38 - IRANRptFeb20
P. 38
8.4 Fixed income
8.4.1 Fixed income - bond news
Four Iranian banks to support central bank-backed bonds
Iran has launched a domestic Sharia-compliant bond to support Iranian manufacturers and non-oil sectors. Named the “Gam” (“Step”) bond, it was this week announced by Central Bank of Iran (CBI) governor Abdolnasser Hemmati.
Domestic manufacturers are enduring a massive downturn in production as Washington’s sanctions and “maximum pressure” campaign hammer Iran’s economy.
Hemmati said he expected the bond to raise 50,000 trillian rials ($3.6bn at the street market rate, $11.9bn at the official fixed rate). It will be issued by four local banks including Melli, Tejarat, Saderat and Mellat.
The CBI chief did not state how much the Sharia-compliant interest rate would be.
“I am confident that the measures taken by the banking system will see growth in the country’s production and economy,” Hemmati said at the bond launch. The Rouhani administration has issued several Islamic bonds during its tenure, including bonds to support investment in oil and gas.
Bonds have been previously touted by the administration as a way to generate revenue outside of the usual income sources. Oil sales continue to remain weak in the face of US sanctions, though there are wide differences between estimates of how much crude is managing to export.
“This is a budget to resist sanctions ... with the least possible dependence on oil,” Rouhani told parliament in remarks broadcast on state television in early December on the coming fiscal year’s state budget. “This budget announces to the world that despite sanctions we can manage the country.”
38 IRAN Country Report February 2020 www.intellinews.com
