Iran is planning to issue sharia-compliant short-term sovereign debt worth about $300m in the form of Islamic treasury bills, as a means of providing fiscal stimulus to its struggling economy.

The bills will be offered to investors at a steep discount to their face value, according to the UK’s Financial Times, which cites anonymous sources.

The debt sale will test investor confidence in the Islamic Republic in the wake of the nuclear agreement with the P5+1 group of countries, which has paved the way for the removal of US-led sanctions.

Analysts are expecting the sale to be the first in a series of public offerings designed to ease the country’s credit crunch and revive financial relations with the rest of the world.

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