More than $652 million (USD) of the participation bonds offered in Iran went unsold last year.
Over 11 months last year (Iran's solar year ended on March 19), the government put up more than $2.8 billion in participation bonds for sale. Nearly $2.2 billion of those bonds were bought, Fars news agency reports.
Almost $2.7 billion of the participation bonds issued last year were non-budget state participation bonds for water and power development companies, oil and gas and transportation infrastructure. A little more than $2 billion of those bonds were sold.
Iran has increasingly relied on issuing state participation bonds to raise money for projects. Iranians have an estimated $300 billion in liquidity and issuing bonds seems be a way to reduce that liquidity which is a major cause of the country's high inflation rate. However the Iranian government and governmental entities' debts to banks have doubled in four years and reached more than $45.8 billion at the start of the last Iranian year (2011). The increasing debt to banks is alarming for the sanctioned Iranian economy.
© Trend News Agency 2012
