Islamic Republic of Iran: Selected Issues

IMF Staff Country Reports, March 29, 2018

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This Selected Issues paper analyzes the development of domestic government securities market in Iran.
The Iranian authorities have intensified efforts to develop a domestic government securities market.
The Debt Management Office is fully staffed with front-mid-back office functions.
An electronic issuance system and effective custody and settlement systems are in place.
A public debt law that identifies the Ministry of Economy and Finance’s role as the sole issuer of government securities and requires the preparation and publication of a medium-term debt management strategy, annual borrowing program, and publication of debt and asset data would enhance transparency, provide investors greater assurance about the government’s capacity to repay debt, and ultimately lower borrowing costs.

Debt Management Office: fully staffed with front-mid-back office functions.
Market infrastructure: electronic issuance system in place.
Post-trade systems: effective custody and settlement systems established.
Legal and transparency gaps: absence of a public debt law that explicitly:
- identifies the Ministry of Economy and Finance as the sole issuer of government securities;
- requires preparation and publication of a medium-term debt management strategy;
- requires preparation and publication of an annual borrowing program;
- requires publication of debt and asset data.

Enact a public debt law with the features listed above to:
- enhance transparency;
- provide investors greater assurance about the government’s capacity to repay debt;
- ultimately lower borrowing costs.