The government has reduced its bank borrowing target by 28% to Tk 990 billion for FY2024-25, down from Tk 1,375 billion, due to lower expenditures and slow ADP implementation, which stood at 18% in the first half of the fiscal year. The Bangladesh Bank estimates actual borrowing may reach Tk 900 billion. Private sector credit growth remained at 7.28% in December 2024, below the 9.80% target. The government borrowed Tk 689.31 billion from banks in the first seven months of FY2024-25, but after repayments, net borrowing stood at Tk 136 billion. Comparatively lower operational expenses of the interim government also contributed to the borrowing cut. The move is expected to increase market liquidity, potentially reducing interest rates on loans and deposits. The government can borrow up to Tk 120 billion from the central bank under the Ways-and-Means Advances (WMA) facility for short-term spending.
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