STAR BUSINESS REPORT

The government is set to borrow an additional Tk 5,000 crore from the banking sector through a special auction of 91-day treasury bills on April 8, according to Bangladesh Bank (BB) officials.

This will be the new government’s second such off-cycle borrowing in just over a week, which will effectively push the total bank borrowing for the fiscal year 2025-26 (FY26) well past the full-year target set in the budget.

The surge in borrowing comes as the government struggles to balance rising expenditure against weak revenue mobilisation.

Spending pressures have mounted from several fronts: emergency fuel oil purchases amid elevated global energy costs linked to the US-Israeli war on Iran, new welfare initiatives including the family card scheme and farm loan waivers, and broader expansion in public outlays, said officials familiar with the matter.

Election expenditure by the interim government had also drained state funds.

At the same time, the National Board of Revenue fell short of its eight-month collection target by 28 percent, leaving a gap of Tk 71,472 crore.

According to central bank data, the government had already raised Tk 5,000 crore through a similar special auction on April 1. Combined with regular borrowing, the two tranches will effectively breach the Tk 1,04,000 crore ceiling set for banking system borrowing in the FY26 budget.

Between July last year and April 1, the interim government and the new BNP-led government had together borrowed at least Tk 1,03,526 crore, or 99.54 percent of the annual target, with nearly three months of the fiscal year still remaining.

A year earlier, net borrowing over the same period stood at Tk 27,739 crore.

Of the amount borrowed so far this fiscal year, Tk 17,386 crore came from the central bank