The Finance Ministry of Norway announced the cancellation of the ban on buying Iranian government bonds Global national pension Fund, reported on the Agency’s website. The restriction was lifted after the lifting of international sanctions against Iran in the framework of the implementation of the nuclear deal.
Global pension Fund is a sovereign Fund the Norwegian government. Its market capitalization amounts to 6,955 trillion Norwegian crowns or $810 billion at the current exchange rate. Until 2006 it was called the Petroleum Fund. It lists the windfall from oil sales.
In October, Bloomberg reported that Norway for the first time decided to use the funds from the sovereign Fund to cover the budget deficit in 2016. In the current year the income of the Fund are expected to be 204 billion kroner, and to stimulate the economy and bring the budget it is planned to withdraw from Fund 208 billion kroner.
The Ministry of Finance of Norway did not specify when or in what amounts the funds of the welfare Fund will be invested in Iranian government bonds.
Bloomberg notes that Norway has been actively investing sovereign Fund in emerging markets in attempts to increase revenue. Iran’s economy is growing at the fastest pace in the middle East, and the yield on its government bonds in two times higher than the Russian or Turkish bonds, says the Agency. In particular, according to Bloomberg, the yield on short-term securities issued by government and private issuers in the amount of approximately $4.5 billion, more than 20%.
The Agency stresses that Iran’s debt market will become even more attractive when the country will confirm the credit ratings that will allow her to release her bonds denominated in euros.
Post-sanctions Iranian banks were once again connected to the international SWIFT system were unfrozen Iranian assets worth up to $100 billion and allowed the export of oil. Iran plans to increase till the end of the year deliveries of oil on 1 million Barr./ a day, to regain market share lost because of the sanctions.
Saudi Arabia pushed the budget deficit to $87 billion because of cheap oil, in early February for the first time declared his readiness to enter the foreign markets. According to analysts, the volume of the first tranche of dollar-denominated bonds may reach $5 billion.