December 16,2022
Despite years of denouncing the US dollar as a colonial holdover, the Central Bank of Iran says it will start selling US dollar denominated bonds for the first time ever.
The point of selling bonds for dollars appears to be to rake in dollars that can then be inserted into the foreign exchange market in an effort to hold down the price of the dollar, which has surged from less than 300,000 rials in late August to more than 380,000 rials in November and December.
A CBI statement released November 15 said the bonds, each worth $100, would be available for sale in amounts of $1,000 to $4,000 to individuals above 18 years of age starting November 19.
It said the bonds would mature after three months on February 14, 2023, adding that buyers will not be allowed to transfer bond ownership or resell them on a secondary market. The bank did not disclose the total size of the planned bond sale or the interest rate.
It said the selling price would be determined by rates on the Iran Currency Exchange (ICE), a market controlled by the Iranian government where banks and exchange shops buy and sell foreign currencies.
The bank said 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. But the idea of Iran denominating bonds in US dollars, a currency the regime has denounced for years and encouraged other countries to stop using, effectively holds the Islamic Republic up to ridicule.