In the first 11 months of the fiscal year, the government of Bangladesh borrowed Tk66,724 crore from the banking system, but the borrowing surged by Tk35,000 crore in the first 13 days of June alone. This spike is attributed to the use of tools like Ways and Means Advances and overdrafts by the central bank, despite many treasury bills and bonds remaining unsold due to banks demanding higher interest rates. Experts warn that this practice of borrowing, likened to printing money, could undermine efforts to curb inflation and contradict the contractionary monetary policy. Additionally, there is a concern about the crowding-out effect on the private sector. The revised budget target for borrowing from the banking sector has increased to Tk1,55,935 crore. Central bank officials emphasize the need to regulate interest expenses and improve the tax-to-GDP ratio to reduce the dependency on borrowing.
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