The Iranian parliament has called for a pause in issuing government bonds on capital markets, accusing the government of President Hassan Rouhani of using the bond market mechanism to shift debt to future administrations. Rouhani’s financial team began issuing Islamic treasury bills, among other bonds, in February 2015 in an effort to pay off part of Iran's 5,120 trillion rials ($158.3 billion) in accumulated debt. Critics argue that the administration is actually not paying off debt through this approach, but is only postponing repayment.
“The government is in a debt spiral, building debt on debt,” Speaker Ali Larijani said at a recent parliamentary session, according to a Feb. 7 report in Iran's leading economic newspaper, Donya-e Eqtesad. The conservative speaker said he believes the bond market is not a reliable instrument for addressing budget deficits, calling instead for the administration to curb “overspending.”
