December 31, 2021
The Raisi Administration plans to continue the Rohani Administration policy of selling bonds to cover the budget deficit—and also wants to vastly increase bond sales.
The Economy Ministry announced November 24 that it will endeavor to sell 100 trillion rials ($350 million) of bonds in each of the four months remaining in this Persian year. That would be an increase of almost two-thirds from the average of 63 trillion rials in bonds sold each month so far this year.
The plan to sell 100 trillion rials worth of bonds per month does not, of course, mean it will accomplish that goal. Buyers have often been reluctant to buy in the last two years since the bond sales policy began. And the Rohani Administration wished it could sell a lot more than 63 trillion rials worth each month.
The bond sales are part of the effort to rein in inflation. Traditionally, Iranian governments have borrowed from the Central Bank to cover budget deficits and the Central Bank has just printed money as needed, thereby feeding inflation. Bond sales avoid that inflationary policy.
The United States and most developed countries almost always use bond sales to fund deficits.
