According to Eghtesadnews, in the final week of the government debt securities auction process, the government sold 10,750 billion tomans of securities and covered its budget deficit from the securities in the last moments of 1999. Surveys show that the record volume of bond auctions has been broken this week, and in parallel with that, the effective interest rate is at its highest weekly level.
What is a government bond auction?
The government sells its bonds in the market of banks and capital institutions to cover some of its budget deficit. This market is conducted by the Central Bank and its report is published every Tuesday by this institution.
The auction of bonds started weekly in June and lasted forty-two weeks. The auction of government bonds is a place to cover the government budget deficit. A path in which less inflation is inflicted on society and therefore the purchasing power of the people of the society is less damaged.
The market is structured in such a way that the government sells its bonds to banks and capital institutions. In the meantime, the Central Bank, as a broker in this market, is always trying to monitor it. Now, in the forty-second week of holding this market, 10 thousand 750 billion Tomans of bonds have been sold by the government, which is almost 10 times more than last week. Is.
This is the highest bond sale among all auction weeks this year. Before that, this record belonged to the seventh week with a record of seven thousand and 900 billion tomans. But what were the details of the sale this week?
Except for the weekend sale
In these securities, two important features are always considered a reason for buying and selling. Interest rate and maturity date.
In the last week of bond sales, out of 22 thousand and 620 billion tomans of bonds offered, only 10 thousand and 750 billion tomans were accepted, which was approximately 47.5% of the total offers. In these transactions, what is more favorable for buyers is less maturity date and higher interest rate.
A comparison of the sales situation in the recent week shows that “Arad 82” had the largest share of sales this week, which was calculated at 50%. These bonds have a maturity of 2 years, but the interest rate was 21.8 percent, and in terms of both the maturity date and the high interest rate, it has been in a favorable position for buyers. Profit has been more effective than all the previous weeks
Miracle of interest rates at the end of the year 99
In the final stage of the initial auction market, the Ministry of Economy was able to attract more and more customers to the bonds in a timely manner. Although 4,300 billion Tomans of bonds were sold through the underwriting route with an interest rate of 22%, but the remaining 6,450 billion Tomans were traded through the securities route with a minimum interest rate of 21%. (77 bonds with 6-month maturity date and 21% interest rate)
The calculation of the weighted rate in the final week shows that this figure has reached 22%. The rate, which has been unprecedented in all the previous weeks. The separation of the volume of transactions with banks and capital institutions shows that, as in previous weeks, the role of stock exchanges in this purchase is more than banks because interest rates are more important to them. have been.
The flexibility shown by the Ministry of Economy in terms of interest rates this week caused the sale of securities to reach its maximum. Finally, by recording the sales figure this week, it is observed that in a total of forty-two weeks, which is approximately 126 thousand billion Tomans The government budget deficit has been financed in this way. This was while the limit set by the government was 125 thousand billion tomans, and now even one thousand billion tomans has been achieved more than expected.
This can be considered a miracle of interest rates
Last week lesson
Earlier in the past forty-one weeks, a total of 115,000 billion tomans of securities had been purchased by banks and capital institutions. The result of dividing the total securities by the number of weeks shows that during this period, an average of 2,800 billion tomans of securities were sold per week. Meanwhile, in the 42nd week, the level of this figure reached 3.8 times the average performance of this market.
Since financing the budget deficit in this way has a very important role in preventing the increase of inflation, it can be concluded that the Ministry of Economy can always better control the inflation of the society by changing the applied interest rates along with other factors. At the same time, achieve its goals of meeting the budget deficit.