The Central Bank of Iran has unveiled foreign exchange Murabaha bonds to provide financing for profitable industrial projects, which will have a maturity period of one to four years.With the aim of strengthening fixed capital formation and securing foreign currency resources to complete national projects with high profit potential, CBI has taken steps to permit the issuance of forex bonds via the Iran Currency Exchange (ICE), IBENA reported.According to these guidelines, the newly-unveiled bonds are securities that represent shared ownership in financial or debt assets derived from a Murabaha agreement, and the bondholder is the owner and creditor of that debt.The issuance of these bonds is strictly authorized only by entities holding a permit from the Central Bank of Iran's Foreign Exchange Commission.The maximum amount for the issuance of foreign currency bonds for each project is set at €200 million, which can be increased to higher amounts based on the discretion and approval of the Foreign Exchange Commission.The interest rates on these bonds will be denominated in euros and range from 5-5.5% annually. This marks the first issuance of forex bonds by CBI.According to the Central Bank of Iran, it has already received applications for the issuance of bonds for financing multiple projects and the relevant procedures are currently underway.The secondary trading of foreign currency bonds is subject to obtaining a license from CBI's Foreign Exchange Commission for determining the relevant conditions and mechanisms, and it will be conducted through ICE.The maturity period for the bonds is a minimum of one year and a maximum of four years, with annual interest rates set at a maximum of 5% for one-year euro-denominated bonds, 5.25% for two-year bonds and 5.5% for three-year and four-year bonds. Interest payments will be made on an annual basis.The adjustment of interest rates and maturity periods for euro bonds, as well as the determination of interest rates for bonds denominated in currencies other than euro, will be carried out by the Central Bank's Foreign Exchange Commission, based on the prevailing conditions.As per the law, exporters of non-oil goods are not allowed to use their export revenues to purchase the bonds, as long as they have not met their commitments regarding the repatriation of export income.The law obliges petrochemical exporters to return at least 60% of their revenue through Nima, the platform where exporters sell their currency earnings to importers of non-essential goods, whereas non-petrochemical exporters must return 50% of their revenue.Exporters are required to sell 20% of their income in cash to moneychangers. The balance can be used for importing goods either by the exporting firms or third parties. Murabaha, also referred to as cost-plus financing, is an Islamic financing structure in which the seller and buyer agree to the cost and markup of an asset. The markup takes the place of interest, which is illegal in Islamic law. It is not an interest-bearing loan but is an acceptable form of credit sale under the Islamic law. As with a rent-to-own arrangement, the purchaser does not become the true owner until the loan is fully paid.In a Murabaha contract of sale, a client petitions a bank to purchase an item on their behalf. Complying with the client's request, the bank establishes a contract setting the cost and profit for the item, with repayment typically in installments. Because a set fee is charged rather than interest, this type of loan is legal in Islamic countries. As religious tenet consider money only as a medium of exchange without any inherent value, banks must charge a flat fee for continuing daily operations. The Central Bank of Iran in February unveiled the ICE apparently in the latest bid to control forex and gold prices that have jumped to levels unseen in the history of the country.Rates in the new center are said to be reference rates for the market based on demand and supply of currency and gold, as well as key economic indicators. (ICE TEHERAN)

Fonte notizia: Financial Tribune