Government Falls Short of Fiscal Year Targets

The yields on treasury bills (T-bills) in Bangladesh fell slightly as banks opted to invest excess liquidity in short-term securities. The interest rate on 91-day T-bills dropped to 11.51%, and on 182-day and 364-day T-bills to 11.75%. The government raised Tk 75 billion by issuing these T-bills to help address its budget deficit. 

American companies in Bangladesh have raised concerns over law and order, especially following unrest in industrial zones, alongside challenges in profit repatriation due to the ongoing dollar crisis and supply chain disruptions caused by port congestion. These concerns were discussed at a meeting between the American Chamber of Commerce in Bangladesh (AmCham) and a visiting US delegation.

The interim government has decided not to reduce the revenue collection target for the current fiscal year, aiming to boost domestic resource mobilization and reduce reliance on foreign loans. Despite a recurring budget deficit and rising external debt, the government emphasizes the need to minimize public money wastage. The revenue target for FY 2024-25 is set 25% higher than t

The Bangladeshi government has decided to implement three new customs procedure codes to enhance the accuracy of export data. These codes will separately track sample exports, CMT (cut, make, and trim) exports, and local exports. Additionally, an export number will become mandatory on bills of export to ensure they are recorded in the ASYCUDA system, aiding in monitoring export earnings repatriation.

Dampened credit demand from private businesses and higher remittance inflows are expected to lead to a decline in yields on government securities (G-Sec), including Bangladesh Government Treasury Bonds (BGTBs) and Treasury Bills (T-bills). Recent auctions on September 8 and September 10 showed a slight decrease in yields, with the Five-Year BGTBs yield falling to 12.37% from 12.40%, and the 91-Day T-bills yield dropping to 11.53% from 11.58%.

The government’s debt to private power producers has reached Tk 360.74 billion by the end of the last fiscal year, driven by capacity charges for electricity generation that often surpass actual power output. This hefty liability exacerbates the financial strain amid dwindling foreign-exchange reserves, which have plummeted from over $48 billion to below $20 billion.