The government--in a bid to meet the budget deficit--borrowed Tk3,554 crore from Bangladesh Bank (BB) in just four days of the first month of the current fiscal year (FY).
From July 1 to July 4 of FY24, the government borrowed Tk 3554crore from the central bank, at the same period, it repaid Tk16 crore to the commercial banks, as per the latest data from the central bank.
Experts have criticised the government borrowing from the central bank, terming the move similar to printed money entering the economy and fuelling inflation.
The Inflation raced to an 11-year high of 9.94 per cent in May, however it stood at 9.74 per cent in June, shows data from the Bangladesh Bureau of Statistics (BBS).
The government borrowed higher amounts from the central bank as commercial banks have been facing a severe liquidity crisis due mainly to the volatility in the foreign exchange market, experts said.
The target of government borrowing from the banking system has been set at Tk1,32,395crore in the national budget of FY24.
In the concluding fiscal year, the government borrowed at Tk1,22,980 crore from the banking sector, of which it borrowed a maximum of Tk 97684 crore from the central bank.
The government bank borrowing in the last fiscal year is 6.54 per cent higher than revised target.
In FY23, The target of government borrowing from the banking sector was set at Tk1,11,608 crore. The target was later reset to Tk1,15,425crore in the revised budget.
A senior Bangladesh Bank official said the government borrowing has increased due to the shortfall in revenue income.
The National Board of Revenue (NBR) collected Tk 3,25,272crore in the concluding FY23, hitting 8.12 per cent growth compared to the previous fiscal year.
However, revenue income still lagged behind Tk44,727crore in the FY2022-23 by attaining 87.91 per cent of its target of Tk3,70,000crore, according to a provisional data of NBR.
In the last fiscal year, the government borrowed a total of Tk133808 crore from the domestic sources excluding net sale of National savings certificates (NSCs).
