Govt borrowing from banks likely to be negative in Q3
Saturday, 9 January 2010
Siddique Islam
The government's net borrowing from the banking system is expected to be negative in the third-quarter (Q3) of this fiscal because of substantial surplus balance in its account, officials said.
The net negative borrowing will reach Tk 9.37 billion during January-March period of the fiscal 2009-10 (FY10), according to the central bank estimate.
A total of Tk 17.13 billion will be borrowed (net) from both banks and non-banking financial institutions (NBFIs) against issuance of the government bonds during the period under review while the net borrowing from treasury bills will be negative worth Tk 26.50 billion.
The government's net borrowing position was calculated on the basis of the new quarterly auction calendar covering January to March period of this fiscal, announced Thursday.
Treasury bills (T-bill) worth Tk 49.50 billion will be issued during the period while the issuance of government bonds will reach Tk 18.50 billion, according to the auction calendar.
The government bank borrowing has drastically fallen because of the large surplus fund in its accounts and lower rate of implementation of the annual development programme (ADP), the Bangladesh Bank (BB) officials said.
The government's net bank borrowing dropped by 21.91 per cent to Tk 61.46 billion during the first-half of this fiscal against the target of Tk 78.71 billion, according to the central bank statistics.
"The surplus balance in government account stands over Tk 100 billion," a BB senior official told the FE, adding that the government's bank borrowing may increase in the fourth-quarter (April-June) of this fiscal because the rate of implementation of the ADP is expected to rise.
Around 28 per cent progress in implementation of the ADP has been recorded during the July-December period of this fiscal, the planning ministry said.
Currently, three T-bills are being transacted through auctions to adjust the government borrowing from the banking system.
The T-bills have 91-day, 182-day and 364-day maturity periods.
On the other hand, four government bonds - 5-year, 10-year, 15-year and 20-year -are being traded in the markets.
Market players, however, said the fund flow in the banking system may increase if the private sector credit growth does not pick up during the period.
"The interest rate particularly on deposits may decrease that would push the excess funds to the capital market from the banking sector," a senior fund manager of a commercial bank told the FE.
The government's net borrowing from the banking system is expected to be negative in the third-quarter (Q3) of this fiscal because of substantial surplus balance in its account, officials said.
The net negative borrowing will reach Tk 9.37 billion during January-March period of the fiscal 2009-10 (FY10), according to the central bank estimate.
A total of Tk 17.13 billion will be borrowed (net) from both banks and non-banking financial institutions (NBFIs) against issuance of the government bonds during the period under review while the net borrowing from treasury bills will be negative worth Tk 26.50 billion.
The government's net borrowing position was calculated on the basis of the new quarterly auction calendar covering January to March period of this fiscal, announced Thursday.
Treasury bills (T-bill) worth Tk 49.50 billion will be issued during the period while the issuance of government bonds will reach Tk 18.50 billion, according to the auction calendar.
The government bank borrowing has drastically fallen because of the large surplus fund in its accounts and lower rate of implementation of the annual development programme (ADP), the Bangladesh Bank (BB) officials said.
The government's net bank borrowing dropped by 21.91 per cent to Tk 61.46 billion during the first-half of this fiscal against the target of Tk 78.71 billion, according to the central bank statistics.
"The surplus balance in government account stands over Tk 100 billion," a BB senior official told the FE, adding that the government's bank borrowing may increase in the fourth-quarter (April-June) of this fiscal because the rate of implementation of the ADP is expected to rise.
Around 28 per cent progress in implementation of the ADP has been recorded during the July-December period of this fiscal, the planning ministry said.
Currently, three T-bills are being transacted through auctions to adjust the government borrowing from the banking system.
The T-bills have 91-day, 182-day and 364-day maturity periods.
On the other hand, four government bonds - 5-year, 10-year, 15-year and 20-year -are being traded in the markets.
Market players, however, said the fund flow in the banking system may increase if the private sector credit growth does not pick up during the period.
"The interest rate particularly on deposits may decrease that would push the excess funds to the capital market from the banking sector," a senior fund manager of a commercial bank told the FE.