In the first seven months of the fiscal year 2023-24, the government of Bangladesh borrowed Tk 29,378 crore from commercial banks, while repaying Tk 29,498 crore to the central bank, resulting in a net borrowing decrease of Tk 120 crore. This falls below the target borrowing of Tk 1.32 lakh crore due to economic crises. The government has implemented a contractionary monetary policy to stabilize the macroeconomic situation and reduced borrowing from domestic sources. Liquidity concerns in the banking sector persist, exacerbated by increased levels of distressed assets and sluggish deposit growth. Despite rising expenditure, revenue collection has fallen. The government’s reliance on borrowing from commercial banks could worsen liquidity issues. Recognizing inflationary risks, the government has exercised prudence in borrowing from the central bank. Total outstanding loans from commercial banks increased to Tk 2,61,847 crore.
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