The government’s borrowing from the banking sources suddenly increased in July-September of the current fiscal year 2017-18.
Bangladesh Bank officials say the government is now being forced to borrow from banks against the backdrop of a surge in its expenditure.
The government has been forced to increase its expenditure to repair the damaged infrastructures, mainly road and highways, caused by the recent floods across the country, they said.
According to the latest BB data, the government borrowed Tk 7,565 crore from July 1 to September 5 although it registered a negative borrowing amount of Tk 18,029 crore in the last fiscal year.
The government set a target of borrowing Tk 38,938 crore from the banking source in the FY17 to manage its budget deficit, but it did not make any net borrowing from the banking sources due to a large amount of net sales in government savings certificates and bonds.
The government set a target of borrowing Tk 28,203 crore from the banking sources this fiscal year.
Besides, the government continues to maintain a large amount of borrowing from the national savings certificates and bond as the clients are investing heavily in the tools due to the higher interest rate on the instrument compared to the other rates prevailing in the market offered by the commercial banks.
According to the latest Directorate of National Savings data, the net investment in the savings instruments increased to Tk 5,053.54 crore in July of the FY18 compared with that of Tk 3,498.37 crore in the same month of the FY17.
A BB official told New Age on Sunday that the government was now spending a lot of money to repair the road and highways excluding its allocation target of fiscal budget which ultimately put an impact on its bank borrowing.
The government is now importing bulk amount of rice and wheat to mitigate the country’s existing food crisis which also fuelled up its borrowing from the banks, he said.
The government is also now implementing its mega projects in line with annual development projects.
The BB official said that the government borrowing might increase more in the months to come as it would have to continue the import of food grains and implement the ADP.
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