Dhaka, Bangladesh (BBN)- Bangladesh government has borrowed over BDT 107 billion in a single day by issuing three types of treasury bills (T-bills) to meet its budget deficit partly.
Actually, the government borrowed BDT 107.04 billion instead of pre-auction targeted BDT 80 billion on Sunday through issuing the T-bills to meet its budget deficit.
“The government’s demand for funds has increased significantly ahead of the end of the outgoing fiscal year (FY 2024-25) to meet its budgetary expenditures,” a senior official of the central bank said, adding that the government has already exceeded the limits for ways-and-means advances (WMAs) and overdraft (OD) drawing facilities from the central bank.
Currently, the government is empowered to borrow up to BDT 120 billion from the BB under the WMAs to meet its day-to-day spending without issuing any securities.
In addition, it is entitled to borrow a maximum of BDT 120 billion through OD drawing facility from the central bank for the same purpose.
However, the yields on T-bills remained almost stable on the day, as banks showed reluctance to invest their excess liquidity in the risk-free securities.
The cut-off yield, generally known as interest rate, on the 91-day T-bills came down to 12.09 per cent on the day from 12.10 per cent earlier while the yield on 364-day T-bills fell to 12.18 per cent from 12.24 per cent.
However, the yield on 182-day T-bills remained unchanged at 12.11 per cent on the day from the previous level, according to the auction results.
Currently, four T-bills are transacted through auction to adjust government borrowings from the banking system. The T-bills have 14-day, 91-day, 182-day and 364-day maturity periods.
The bills are short-term investment tools issued through auction, 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