As the fiscal year comes to an end, the government of Bangladesh is relying on banks, particularly the central bank, to secure funds to cover its expenses due to a drop in revenue collection. In April, the government borrowed Tk29,697 crore from banks, marking the highest amount borrowed in a single month during the fiscal year 2022-23. From July to April, the government borrowed a total of Tk82,057 crore from the banking system, with around 80% of this amount provided by the central bank. However, borrowing from the central bank, known as high-powered money, can potentially lead to inflation and reduce the availability of loanable funds in the private sector. Analysts predict that the government’s borrowing from banks may exceed the target for the fiscal year, emphasizing the need for the government to focus on domestic resource mobilization to control inflation. The government had set a borrowing target of Tk1,06,334 crore for the fiscal year 2022-23.
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