Iran says preparing to issue its first forex bonds
Iran’s top banker says the country will for the first time issue foreign currency bonds in an effort meant to dissuade investors from the fluctuating forex market and help boost the Rial.
Valiollah Seif, the governor of the Central Bank of Iran (CBI), was quoted by media as saying that a plan to the same effect would be unveiled within the next two weeks, stressing that the CBI wanted to lure investors keen on dabbling in the foreign exchange market.
“Currently, there are a variety of choices for investors, including the monetary market, the stock market, the bond market and the housing sector,” Seif was quoted as saying by Iran’s IRNA news agency.
He added that the National Iranian Oil Company (NIOC) was also planning to issue foreign currency bonds of its own, emphasizing that the company’s plan to the same effect would proceed once the related authorizations would be granted.
The official added that CBI’s menu of currency investment includes measures that would provide safe investment options combined with reasonable yields for the public, according to a report by Iran’s English-language newspaper the Financial Tribune.
After repeatedly warning investors speculating about the fall of the Rial that they were heading for losses because his bank could control the foreign exchange market, the CBI chief has resorted to forex bonds to curb the heated demand for hard currency.
The Rial dropped to 46,500 against the US Dollar in the open market late January from 37,700 in mid-2017. Stopping short of touching the prohibitively psychological threshold of 48,000 on Monday, it finally bowed to CBI’s heavy intervention and was quoted at 46,680 against the greenback on Tuesday.
However, the rollercoaster of exchange rates in the past couple of weeks seems to have undermined the markets’ faith in officials promising more stable days for the forex market, the Financial Tribuneadded in its report.