In July 2023 net sales of savings instruments witnessed an impressive eightfold increase compared to the same month last year. According to data from the Department of National Savings (NSD), total sales of savings certificates reached Tk 7,860.60 crore, with net sales amounting to Tk 3,249 crore after deducting the government’s principal payments of Tk 4,610.79 crore.
In contrast, during the corresponding month of the 2022-2023 fiscal year, total sales amounted to Tk 71,843 crore, with net sales of just Tk 393 crore after principal payments of Tk 6,625 crore. The government relies on savings certificates to bridge budget deficits, but the high interest rates also inflate its interest expenses. To curb excessive purchases, the government mandated tax certificates and reduced purchase limits last fiscal year. Despite inflation, individuals are turning to savings certificates due to higher interest rates compared to bank deposits. The government aims to borrow Tk 20,000 crore from savings tools in FY23 and Tk 18,000 crore in FY24 as part of its domestic borrowing plan.
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