REJAUL KARIM BYRON and JAGARAN CHAKMA

The government’s borrowing from domestic sources surged in the first half of FY25, primarily driven by a substantial increase in the issuance of special bonds, particularly those issued to clear arrears to electricity and fertiliser producers, as well as treasury bills (T-bills) and bonds targeting institutional and individual investors.

Net borrowing from domestic sources in the first six months of the current fiscal year stood at around Tk 31,432 crore, about 69 times higher than the Tk 456 crore recorded in the same period of the preceding year, according to a Bangladesh Bank report released yesterday.

This is about 27 percent of the government’s total revised borrowing target of Tk 117,000 crore from domestic sources.

“Despite higher repayments of previous debts, government borrowing from the domestic banking system in the six months showed positive growth compared to the same period of the preceding year, owing to increased financing through government securities,” the BB report stated.

“Net non-bank borrowing also showed a significant year-on-year rise during the same period, primarily due to substantial holdings of government securities by various institutions and individuals outside the banking sector.”

The government’s net borrowing from the banking system reached Tk 6,744 crore, approximately 6.8 percent of the revised borrowing target for FY25, which stands at Tk 99,000 crore.

However, the government did not borrow from the Bangladesh Bank. Instead, it repaid Tk 58,116 crore to the central bank during the first half of the fiscal year.