In spite of a decline in the debt securities rates for the third consecutive week, the effectiveness of decreasing interest rates is yet to become fully evident in the money and capital markets.

This week, trades of the very first Islamic treasury bills (BT071) with more than 1-year maturity began in Farabourse. Low trading volume and longer term to maturity in comparison with other Islamic t-bills led to failure pricing on the opening day, an indication of investors’ low interest and trust in the bond.

Trading on the government Ijarah bonds (I41Q1) with a total value of IRR 2,500 bn (USD 62 mn) began in Farabourse. The papers mature in 4 years with a 20% coupon rate and semiannually payment. In addition, IRR 15 tr (USD 374 mn) trades of Islamic treasury bill TB11 halted due to next week settlements.

With only IRR 32 tr (USD 800 mn), debt capital markets cover a small percentage of the country’s money supply. However, there is no publicly available accurate measure to assess the success of monetary policies.

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