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Islamic Finance

Iran shelves plans to sell oil-backed Islamic debt to the public

Published 14 Sep,2020 via Bloomberg Markets - Iran has canceled plans to enable members of the public to invest in the country’s oil production via Islamic bonds, a state-run news service reported.

The plans were first announced by President Hassan Rouhani in August as part of efforts to control money supply and parry the impact of both U.S. sanctions and the coronavirus on Iran’s ailing economy.

Iranian media reported at the time the plan would involve the pre-sale of barrels of oil on Iran’s energy exchange, or IRENEX, through Islamic “salaf” bonds, which are similar to futures.

Similar ideas to raise funds will be considered for inclusion in draft proposals for next year’s budget, which will cover the 12 months to March 2022, the Islamic Republic News Agency reported, citing First Vice President Eshaq Jahangiri.

The government will for now focus its efforts on controlling inflation and expanding welfare support and cheap loan programs that were launched earlier this year in response to the pandemic, Jahangiri said.

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Golnar Motevalli