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16. 10. 15
Created: 15 October 2016

Iran's government sold USD 279 million of Murabaha contracts for wheat on Iran Fara Bourse OTC market last week. This was the first time the government turned to the financial markets for financing its guaranteed wheat purchase scheme from Iranian farmers.

The financial market is becoming bigger and bigger role in financing government expenditure as the revenue from oil sales witnessed a major fall during the last few years.

Iran's government has a wheat purchase scheme that pays farmers for their production a guaranteed price. This year's production of 14 million tons has been a record production. Last month, the government has sold USd 745 million of Salaf contracts - a type of Islamic forward contracts to purchase a commodity at a fixed price at a specified future time - to finance these purchases.