Iran central bank to start selling forex bonds to stabilize currency market
The Central Bank of Iran (CBI) says it will start selling US dollar denominated bonds for a first time as part of its foreign exchange stabilization program.
A CBI statement released on Tuesday said that the $100-worth bonds will be available for sales of $1,000 to $4,000 to individuals above 18 years of age starting on November 19.
It said the bonds will mature on February 14, 2023, adding that buyers will not be allowed to transfer bond ownership or resell them in a secondary market. The bank did not disclose any details about the size of its forex bonds issuance.
It added that the selling price of the bonds will be determined by rates available in Iran Currency Exchange (ICE), a market controlled by the Iranian government where banks and exchange shops buy and sell foreign currencies.
The rate in the ICE, which is slightly lower than the unofficial currency market in the Iranian capital Tehran, is influenced by the amount of hard currency supplied at NIMA, another secondary market where Iranian exporters are supposed to sell their proceeds to importers.
The CBI statement said forex bonds can be repurchased by the CBI at any date before they are matured, adding that repurchase prices will be those reported in the close of trade on the previous day in the ICE.
Issuing forex bonds is part of a broad package of measures adopted by the CBI to stabilize prices in Iran’s volatile foreign currency market.
Currency prices soared to record highs last week with US dollar reaching as much as 360,000 Iranian rials.
CBI officials say forex prices have stabilized in recent days as a result of measures taken by the top lender. The US dollar closed at 358,200 agains the rial on Tuesday.
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