Govt’s net bank borrowing increases by 15% in FY’13

Dhaka, Bangladesh (BBN)-The government’s net borrowing from the banking system increased by more than 15 percent in the just-concluded fiscal year to partly finance its budget deficit, officials said.

 

Its borrowing from the banking system rose to BDT 247.76 billion until June 30 last from BDT 214.59 billion in the corresponding period of the previous year, according to the central bank statistics.

 

The government borrowing from the banking system exceeded the original target for the outgoing fiscal year but it was lower than revised one, according to the officials.

 

The ministry of finance (MoF) set borrowing target from the banking system at BDT 230 billion for the fiscal year (FY) 2012-13, while it was revised at BDT 285 billion lastly.

 

“The government’s borrowing from the banking system started rising from May last because of increased funding for implementation of Annual Development Programme (ADP) projects,” a senior official of the Bangladesh Bank (BB) told BBN in Dhaka.

 

He also said the government borrowed from the banking system ‘heavily’ on June 30, the last working day of the FY 13, to square up its overall fund position.

 

The government’s bank borrowings shot up by BDT 61.62 billion to BDT 247.76 billion on June 30 last from BDT186.14 billion in the previous working day, the BB data showed.

 

The BB official also said the government borrowed BDT 300.28 billion, in gross terms, from the commercial banks through issuing different bonds and treasury bills (T-bills) in the FY 13, while it repaid BDT 52.51 billion to the central bank.

 

During FY 14, 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 finance 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.

 

Furthermore, five government bonds with duration of two, five, 10, 15 and 20 years respectively – are being traded in the market.

 

BBN/SSR/AD-12July13-4:21 pm (BST)