Dhaka, Bangladesh (BBN) - The government’s borrowing from the banking system soared in the first week of this fiscal year (FY), 2013-14, compared to the corresponding period of the previous fiscal, to partly finance its budget deficit.
It’s net borrowing from the banking system shot up to BDT 33.55 billion until July 7 last as against only BDT 6.43 billion in the same period of the FY 13, according to the central bank statistics.
“Collection of tax revenue shortfall against target in the just-concluded fiscal has forced the government to borrow more from the banking system to meet its budgetary expenditure,” a senior official close to the public debt management-related activities said.
The aggregate collection of tax revenue fell short of the target by around BDT 30 billion in the FY 13 due to a significant fall in import duty and domestic VAT collection.
The National Board of Revenue (NBR) collected BDT 1.09 trillion in taxes in the just concluded fiscal against the target of BDT 1.12 trillion, according to the figures.
The official also said the government borrowing from the banking system will decrease soon, as the Bangladesh Telecommunication Regulatory Commission (BTRC) deposited BDT 20 billion in the government account on Tuesday.
The government has borrowed BDT 13.61 billion from all scheduled banks through issuing treasury bills (T-bills) and bonds during the period, while BDT 19.94 billion from the Bangladesh Bank (BB), to finance budget deficit partly for the ongoing FY 14.
During the present fiscal, the government is set to borrow a total of BDT 259.93 billion from the banking system through issuing T-bills and bonds to partly meet its budget deficit.
Under the arrangement, the government has decided to borrow BDT 143.55 billion from the banking system by issuing bonds, while BDT 116.38 billion will be borrowed through auction of short-term T-bills.
Currently, three T-bills are being transacted through auctions to adjust the government's borrowing from the banking system. The T-bills have 91-day, 182-day and 364-day maturity periods.
On the other hand, five government bonds - with duration of two, five, 10, 15 and 20 years respectively - are being traded in the market.
BBN/SSR/AD-17July13-11:34 am (BST)
