The government of Bangladesh has stopped borrowing from the central bank, instead repaying previous loans, resulting in a reduction of Tk 18,250 crore in government debt to Bangladesh Bank during July-August of the current fiscal year. However, the government borrowed Tk 28,952 crore from commercial banks in the same period, bringing the net debt from the banking sector to Tk 10,702 crore. This shift is part of Bangladesh Bank’s effort to control inflation by avoiding money printing for government loans. Previously, Bangladesh Bank had secretly provided Tk 41,000 crore in loans during the last government term, exceeding the overdraft limit of Tk 8,000 crore. While inflation remains high at 10.49% as of August, the government’s current focus is on controlling spending and reducing waste. Commercial banks are now the primary source of government borrowing, largely funded by institutional and individual savings due to the attractive interest rates on treasury bills and bonds. As of August, the government’s total debt in the banking sector stands at Tk 485,192 crore, with debt to commercial banks rising to Tk 347,393 crore and debt to Bangladesh Bank decreasing to Tk 137,799 crore.
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