Record sale of savings certificates helped government borrow less from the banking sector during the July-February period of the current fiscal year, official data showed, reports BSS.
According to Bangladesh Bank (BB), the government's borrowing from the banking sector declined in the past eight months of the current 2014-15 financial year (FY15), thanks to the buying spree of savings certificates by a large number of people.
The government during the July-February period paid back Tk 60.50 billion (6,050 crore) against its borrowing of Tk 1,142.44 billion (1 lakh 14 thousand 244 crore) at the end of June last year. As a result, the total borrowing in February this year fell to Tk 1,081.93 billion (1 lakh 8 thousand 193 crore.)
The significant fall in state borrowing was driven by the sale of savings certificates, which hit the record high of Tk 157.39 billion (15 thousand 739 crore) during July-January, almost three times higher than the last year's sale proceeds for the same period, according to the Directorate of National Savings.
"The high rate of interest allured many to investment in savings tools", said economist Dr. Ahsan H. Mansur.
The executive director of the Policy Research Institute (PRI) also believed that people found savings certificates as a safe and secure avenue for investment while other options became unpredictable against the backdrop of political instability.
He said the record sale of savings certificates would also help government finance the budget deficit.
Govt borrowing falls on record sales of savings certificates
FE Team | Published: March 19, 2015 00:00:00 | Updated: November 30, 2026 06:01:00
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