Dhaka, Bangladesh (BBN)– The government is set to make a net borrowing of BDT 25.50 billion from the country’s banking system in March to partly meet its budget deficit.

The government may take up to BDT 142 billion as gross borrowing from the banking system this month by issuing treasury bills (T-bills) and bonds, according to the auction calendar, issued by the Bangladesh Bank (BB) on Thursday.

The government’s net bank borrowing may reach BDT 25.50 billion in a single month (March), after deducting 116.50 billion against the government securities that would be mature in the month, according to officials.

In February, such borrowing was BDT 46 billion.

The government is likely to exceed net bank borrowing target in March as its account deficit stood at around BDT 50 billion as on February 25 that was fulfilled by using ways and means advances (WMAs) facility from the central bank, according to officials.

In that cause, the Ministry of Finance may allow 14-Day T-bills auction to meet the government’s deficit, they hinted.

Under the existing rules, the government is empowered to borrow up to a maximum amount of BDT 60 billion from the BB using WMAs facility without issuing any securities.

The government may also avail overdraft (OD) drawing facility from the central bank, if its account negative balance crosses BDT60 billion-mark.
Meanwhile, the government’s net bank borrowing stood at BDT 523.72 billion as of February 16 of the current fiscal year (FY) 2019-20, according to the BB’s confidential report.

Of the total, the government borrowed BDT 448.19 billion from the scheduled banks by using T-bills and bonds, and the remaining BDT 75.52 billion from the central bank.

Earlier, the government had set to borrow BDT 473.64 billion from the country’s banking system to meet its budget deficit for the FY ’20. It was BDT 308.95 billion in FY ’19.