Govt to borrow Tk 155b from banks next fiscal
Monday, 7 June 2010
Siddique Islam
The government's borrowing from the banking sector is set to shoot up by a massive 343 per cent in the next fiscal year as it moved to implement hundreds of development projects.
The government will borrow around Tk 155 billion in the fiscal year of 2010-2011 (FY11) from the banking system, up by around 343 per cent from the ongoing fiscal year.
"The government will borrow money from the banking system using treasury bills and bonds to expedite the implementation of Annual Development Programme (ADP) in line with its election commitments," a senior government official close to the government debt management activities told the FE Sunday.
The national economic council has already approved a Tk 385 billion annual ADP for FY11 giving priority to power generation and transport sector development.
"The government will also follow the existing debt management strategy towards long-term borrowing from short-term to facilitate development activities," the official said.
Under the strategy, the government will increase borrowing for longer tenure by issuing different bonds instead of short-term borrowing through treasury bills (T-bills).
"Around 80 per cent will be borrowed issuing long-term bonds while the remaining 20 per cent through T-bills in the next fiscal," the official said, adding that the government may continue putting emphasis more on long-term borrowing than the short-term one.
The finance ministry has set the government's borrowing at only Tk 35 billion from the banking system by the end of the fiscal 2009-10 (FY10) from the revised target of Tk 86.61 billion, officials confirmed.
"We've conducted the auctions of bonds and T-bills in line with the min istry's latest estimation of the government bank borrowing for FY10," a senior official of the Bangladesh Bank (BB) told the FE without elaborating.
Earlier, the ministry revised the government's bank borrowing target for FY10 down to Tk 86.61 billion from the original Tk 167.55 billion.
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 on the market.
Officials said the government borrowing from the banking sector has already dropped significantly compared to the revised target because of the increased flow of foreign aid as well as higher borrowing from national savings directorate (NSD) certificates.
The government's borrowing from the banking sector is set to shoot up by a massive 343 per cent in the next fiscal year as it moved to implement hundreds of development projects.
The government will borrow around Tk 155 billion in the fiscal year of 2010-2011 (FY11) from the banking system, up by around 343 per cent from the ongoing fiscal year.
"The government will borrow money from the banking system using treasury bills and bonds to expedite the implementation of Annual Development Programme (ADP) in line with its election commitments," a senior government official close to the government debt management activities told the FE Sunday.
The national economic council has already approved a Tk 385 billion annual ADP for FY11 giving priority to power generation and transport sector development.
"The government will also follow the existing debt management strategy towards long-term borrowing from short-term to facilitate development activities," the official said.
Under the strategy, the government will increase borrowing for longer tenure by issuing different bonds instead of short-term borrowing through treasury bills (T-bills).
"Around 80 per cent will be borrowed issuing long-term bonds while the remaining 20 per cent through T-bills in the next fiscal," the official said, adding that the government may continue putting emphasis more on long-term borrowing than the short-term one.
The finance ministry has set the government's borrowing at only Tk 35 billion from the banking system by the end of the fiscal 2009-10 (FY10) from the revised target of Tk 86.61 billion, officials confirmed.
"We've conducted the auctions of bonds and T-bills in line with the min istry's latest estimation of the government bank borrowing for FY10," a senior official of the Bangladesh Bank (BB) told the FE without elaborating.
Earlier, the ministry revised the government's bank borrowing target for FY10 down to Tk 86.61 billion from the original Tk 167.55 billion.
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 on the market.
Officials said the government borrowing from the banking sector has already dropped significantly compared to the revised target because of the increased flow of foreign aid as well as higher borrowing from national savings directorate (NSD) certificates.