Dhaka, Bangladesh (BBN) – The government’s gross borrowing from the banking system jumped on Sunday indicates net borrowing may turn into positive from negative by the end of this fiscal year (FY).

Bangladesh government borrowed BDT 13 billion on the day against previously fixed target worth BDT 2.0 billion through holding of its 91-Day Treasury Bills (T-bills).

“The government bank borrowing may rise in the coming days if its account’s negative balance continues,” a senior official of the Bangladesh Bank (BB) told the BBN in Dhaka.

The government borrowed higher amount of money on the day through holding the auction of 91-day T-bills following balance of its account turned into negative at over BDT 30 billion, the central banker explained.

“Normally, the government bank borrowing increase in June each fiscal year,” he added.

However, the government’s net bank borrowing is still at a negative level, amounting to BDT 216.69 billion as on April 26, mainly due to higher growth in the savings certificate sales, according to the central bank’s confidential report.

The government had set a bank-borrowing target of BDT 282.03 billion for the FY 2017-18 to partly finance the budget deficit.

Under the proposed bank borrowing, the government will borrow BDT 208.87 billion through issuing long-term bonds while the remaining BDT 73.16 billion through treasury bills (T-bills).

Currently, four T-bills are being transacted through auctions to adjust the government’s borrowings from the banking system. The T-bills have 14-day, 91-day, 182-day and 364-day maturity periods.

The T-bills are short-term investment tools issued through auctions, conducted by the central bank on behalf of the government.

Furthermore, five government bonds, with tenures of two, five, 10, 15 and 20 years respectively, are traded on the market.

BBN/SSR/AD