Dhaka, Bangladesh (BBN) - The Bangladesh government did not borrow from the banking system in net terms during the just concluded fiscal year (FY); rather it repaid a big portion of debts.
This was due to a rise in sales of savings instruments and slow implementation of development projects, according to officials.
The government paid back BDT 180.29 billion in the FY 2016-17 to the banks as against its borrowing of BDT 48.07 billion in the FY 16, according to the central bank’s latest data.
However, the government's borrowing from the banking system stood at BDT 906.60 billion at the end of June 30 this year, declining from BDT 1086.89 billion on the same day of the previous year.
Initially, the government's bank borrowing target was set at BDT 389.38 billion for the FY 17, but was later revised down to BDT 239.03 billion.
Talking to BBN, a senior official said the government borrowed around BDT 170 billion in June last to meet development expenditures despite the overall net bank borrowing was negative.
Implementation of the development projects normally becomes faster during the last month of each fiscal year, according to the official.
The government ministries and agencies spent BDT 1.06 trillion out of total Annual Development Programme (ADP) of BDT 1.19 trillion worth of outlay in the FY 17.
On the other hand, net sales of national savings certificates jumped by more than 39 per cent to BDT 469.69 billion during the July-May period of the FY17 from BDT 336.89 billion in the same period of FY16.
Meanwhile, the Ministry of Finance had set a bank-borrowing target of BDT 282.03 billion for the FY18 to finance the budget deficit.
Under the proposed arrangement, BDT 208.87 billion will be borrowed from the banking system by issuing long-term Bangladesh Government Treasury Bonds (BGTBs) while the remaining BDT 73.16 billion through auctions of short-term treasury bills (T-bills).
BBN/SSR/AD