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The government’s borrowing from the Bangladesh Bank soared to Tk 72,700 crore at the end of September from Tk 55,866 crore in June.
The government’s borrowing from the country’s banking system including the BB, however, was around Tk 12,000 crore in the July-September period of 2022 as the government repaid loans to the scheduled banks rather than taking credits from them.
The government’s net bank borrowing was Tk 4,697.78 crore in the same period in 2021.
The government’s borrowing from the central bank was Tk 16,834 crore in the first quarter (July-September) of the financial year 2022-23 while it repaid Tk 4,000 crore to the scheduled banks.
In September 1- 29, the government’s borrowing from the BB was Tk 8,501.65 crore.
The target of borrowing from the banking system has been set at Tk 1,06,334 crore for FY23.
Of the total amount, the government took Tk 18,762 crore through issuing treasury bills and Tk 51,251.33 crore through treasury bonds.
The government’s total outstanding borrowing from the scheduled banks declined to Tk 2.10 lakh crore on September 29 which was Tk 2.14 lakh crore on June 30.
According to Bangladesh Bank data, the government’s borrowing from the central bank was Tk 24,542.14 crore as of June 30, 2021.
Bankers said that government’s bank borrowing increased due to the rising cost of government’s expenditures while its income was not increasing significantly.
It also could not get money from selling national savings certificates, they said.
In July-August, the government got only Tk 401 crore from selling NSCs.
Besides, the country’s banking sector was facing liquidity shortage due to a slow deposit growth against high lending growth and a surge in the dollar purchase from the central bank to meet the foreign currency crisis.
So, the government might choose the central bank for financing its expenditures to increase liquidity in the banking sector, they said.
The net outstanding position of the government’s borrowing from the banking sector, including the BB, reached Tk 2.82 lakh crore on September 20 from Tk 2.70 lakh crore in June 2022.
The amount was Tk 2.02 lakh crore on June 30, 2021.
To finance the budget, the government borrows mainly from two domestic sources — banking system and other non-banking domestic sources.
The government borrowing from the banking system consists of borrowing from the central bank and the scheduled banks.
From the banking system, the government borrows mainly through advances, overdraft and issuance of treasury bills and bonds.
However, balances of government deposits and other funds are net out from the banking system borrowing.
On the other hand, the government borrowing from non-banking domestic sources includes savings instruments introduced by the Department of National Savings and government T-bills and bonds held by non-bank financial institutions, insurance companies and individual investors.
During July to October 13, the BB sold $4.1 billion to banks to address dollar shortage in the financial sector which on the other hand mopped up equivalent local currency from the banking system.
The government’s borrowing from the banking sector was only Tk 3,4478.29 crore in FY21 that doubled to Tk 72,750 crore in FY22.
For FY22, the government targeted to borrow Tk 76,452 crore from the banking sector.
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