Iraq raises interest rate on local bond issue to boost sales

Iraq has raised the interest rate on a local bond issue worth 1.5 trillion Iraqi dinars ($1.3 billion) to boost sales, central bank spokesman Aycar Jabbar said on Wednesday. The central bank has increased the rate to 8 percent from the 6 percent offered on March 15, when the two-year bonds went on sale, he told Reuters.
All those who have bought the bonds will receive the same interest rate regardless of when they bought them, he said.
The central bank will also be keeping the sales period open until the issue is fully subscribed, he said.
The sale is part of an effort to plug a government deficit caused by tumbling oil prices and the cost of fighting an Islamic State insurgency. The bonds are sold on behalf of the Finance Ministry and mature on March 14, 2018.