91-Day T-Bill Rate Falls to 11.51%

The Bangladesh government plans to clear approximately $2 billion in arrears to international energy suppliers within two months, addressing overdue payments to companies like Chevron Bangladesh and QatarEnergy.

The Bangladesh government’s operational expenses have surged, consuming over two-thirds of the proposed Tk8.48 trillion FY26 budget—114% higher than development spending, the widest gap in 14 years. Rising subsidies, loan interest, and public sector salaries have led to fiscal strain, forcing reliance on borrowing.

The government is considering increasing Trading Corporation of Bangladesh (TCB) dealers’ commissions by Tk 0.50 per kg/litre due to rising transport costs. TCB, which operates sales drives for 10 million low-income consumers, proposed this adjustment to the commerce ministry after a board meeting in January.

The National Economic Council (NEC) has slashed the Annual Development Programme (ADP) to Tk 2.16 lakh crore, an 18% reduction from the original Tk 2.65 lakh crore allocation for FY25. Government funding has been cut by Tk 30,000 crore (18%), while foreign funding has been reduced by Tk 19,000 crore (19%).

The government's borrowing from domestic sources surged in the first half of FY25, reaching Tk 31,432 crore—nearly 69 times higher than the previous year—driven by special bonds issued to clear arrears and increased reliance on treasury bills and bonds.

Bangladesh’s budget expenditure surged by nearly 25% year-on-year in the first five months of FY25, reaching Tk 194,793 crore, primarily driven by soaring interest payments and subsidies, despite a decline in development spending. Operating expenditure rose by 40% to Tk 170,491 crore, with interest payments jumping 76% to Tk 71,213 crore, of which 89% was spent on domestic debt servicing.