Government Borrowing from Domestic Sources 1

Transcription

1 Monthly Report On Government Borrowing from Domestic Sources 1 July-September, FY18 Research Department Bangladesh Bank 1 The report has been prepared by Money and Banking Division, Research Department, Bangladesh Bank (the Central Bank of Bangladesh) Comments are welcome to mohammadabdul@bborgbd, arjinaefa@bborgbd & smsumon@bborgbd 1

2 -8, -4, 4, 8, 12, 16, Government Borrowing from Domestic Sources in July-September, FY18 The government borrows from two domestic sources: banking system through Treasury Bills (T-Bills) & Bonds and the non-banking system mainly through National Savings Directorate (NSD) Instrument-wise govt domestic borrowing (net) during July- September, FY18 is depicted in Figure-1 Figure-1: Instrument-wise Govt Domestic Borrowing (Net) during July-September, FY18 Ways and Means Adv Overdraft Overdraft Block Govt Currency Liabilities Treasury Bills Treasury Bonds Special T Bonds Balances of GIIB Fund NSD Instruments Adv to Food Ministry Adv to Other Min,Auto&Semi-Auto Accrued Interest Govt Deposits (-) Other securities Taka in Crore Source: Debt Management Department, Statistics Department, Bangladesh Bank, National Savings Directorate, September 217 Govt domestic borrowing (net) stood at Tk crore during July-September, FY18 after the adjustments with T-Bills and Bonds, NSD, Ways and Means Advances (WMA), advances to Food Ministry and other Ministries, Overdraft (OD) current and block accounts, accrued interest, and advances and deposits of autonomous and semiautonomous bodies, balances of GIIB (Government Islamic Investment Bond) fund as well as deduction of cash balance in the form of govt deposits with Bangladesh Bank and scheduled banks (ie including banking and nonbanking sources) It may be noted that the amount was Tk crore and Tk crore during July-August of FY18 and July-September of FY17 respectively The govt domestic borrowing (net) during July-September, FY18 is 26 percent lower than that of the same period of the previous year It may be mentioned that Govt borrowed Tk crore through NSD instruments in July-September, FY18 It is observed that govt deposits increased by Tk 1125 crore (net) with the banking system during this period Deposits with Bangladesh Bank (BB) increased by Tk 2297 crore and deposits with scheduled banks (SBs) decreased by Tk 1172 crore Govt borrowed (net) Tk 5424 crore through T-Bills and Bonds from the banking system during July-September, FY18 2

3 Jul-17 Aug-17 Sep-17 Taka in crore July Jul-Aug Jul-Sept Taka in crore From Figure-2, it is observed that the net borrowing from banking system was negative in July, FY18 But, Govt borrowing increased by Tk crore through banking system during July- August, FY18 Figure-2: Movements in Government Domestic Borrowing during July-September, FY18 2, 15, 1, 5, -5, -1, -15, However, Govt borrowing decreased by Tk crore through banking system during July-September, FY18 BB SBs Non-Bank Total Source: Debt Management Department and Statistics Department of Bangladesh Bank, National Savings Directorate, September, 217 In addition, non-bank govt borrowing (net) stood at Tk crore during July- September, FY18 As a result, govt borrowing (net) from the domestic sources during July-September, FY18 stood at Tk crore The movement in net govt borrowing from different domestic sources during July-September, FY18 is demonstrated in Figure-2 Figure-3: Monthly Trends in Government Domestic Borrowing during July-September of FY18 2, 15, 1, 5, -5, -1, -15, BB SBs Non-Bank Total Source: Debt Management Department and Statistics Department of Bangladesh Bank, National Savings Directorate, September 217 Figure-3 shows the monthly movement of government net domestic borrowing during July- September of FY18 During the month of September, 217, Govt domestic borrowing sharply decreased by Tk crore (repaid Tk 85 crore to BB and borrowed Tk 9582 crore from SBs, Tk 4274 crore from non-bank) which is Tk crore lower than that of the month of August, 217 3

4 -16, -8, 8, 16, 24, 32, 4, 48, 56, 64, In the budget of FY18, Tk 6352 crore has been fixed for borrowing from domestic sources by the government of which Tk 2823 crore and Tk crore have been targeted to borrow from banking and non-banking sources respectively During July-September of FY18, the net repayment and holding of cash balances with Bangladesh Bank stood at Tk crore On the other hand, the net borrowing with scheduled banks stood at Tk crore during the same period Figure-4: Budget Target and Net Govt Domestic Borrowing during July-September of FY18 Bangladesh Bank Scheduled Banks Actual (Banking System) Target (Banking System) Actual (Non-Bank) Target (Non-bank) Actual (Total) Target (Total)) Taka in Crore Source: Debt Management Department and Statistics Department of Bangladesh Bank, National Savings Directorate, September 217 A comparative picture of government total budget target and actual domestic borrowing situation during July-September of FY18 is shown in Figure-4 Government total borrowing from other than banks (including NSD, T-Bills and Bonds) stood at Tk crore of which Tk crore was borrowed through NSD instruments during July-September, FY18 The total net government domestic borrowings (banking and nonbanking sources) stood at Tk crore during July-September of FY18 which is 177 percent of total budget target 4

5 Major Findings of the Govt Borrowings from Domestic Sources: Total Govt domestic borrowings (net) from banking system decreased by Tk 282 billion during July-September, FY18 Govt borrowed Tk 135 billion (of which Tk 1269 billion through NSD instruments) from other than banks in July-September, FY18, which is 42 percent of the total budget target from non-banking sources As the interest rate of NSD certificate is significantly higher than any other interest rate prevailing in the domestic market, Govt borrowing is increasing much through NSD certificate 5

6 Annex-1 Table I : Government Borrowing Position from the Banking System during July-September of FY18 (Provisional) (Taka in crore) Sl Outstanding as Particulars Issue and Maturity Objectives Outstanding as on Outstanding as on No on Change (+) / (-) date 3 June August 17 3 September 17 September 17 July-Sept =(7-6) 9=(7-5) A Bangladesh Bank To increase 1 Ways and Means Advances Government cash balance 2 Overdraft Overdraft Block Devolvement a) Treasury Bills b) Treasury Bonds Government Currency Liabilities Advances to Autonomous and Semi-autonomous Bodies 7 Accured Interest Government (-) BB's Balances of GIIB Fund (-) A Total : (1 ++ 9)* 12, ,562 6,5553-8,5-6,2824 B Deposit Money Banks (DMBs) 1 Government Treasury Bills i) Treasury Bills (Less than 1 year) To increase Government cash balance 2 Bangladesh Govt Treasury Bonds (BGTB) i) 2-years Bangladesh GovtTreasury Bonds To increase long-term ii) 5-years Bangladesh GovtTreasury Bonds investment of different iii) 1-years Bangladesh GovtTreasury Bonds banks, non-bank iv) 15-years Bangladesh GovtTreasury Bonds financial institutions and v) 2-years Bangladesh GovtTreasury Bonds employees GF of different companies Others Treasury Bonds a) 5 Years and above (Specialized Bonds) Issued 16 Jan-211 and 7 &1-years (BJMC&BTMC) interest free maturity date 16 To repay the loan of i) Treasury Bond- 217 &22 January 218 & 221 BJMC & BTMC respectively 25-years (Jute)Treasury Bond-218 bearing ii) 5 percent interest 25-years (Jute) Treasury Bond-219 bearing iii) 5 percent interest Issued 1 Nov-1993 and maturity date 1 Nov- 218 Issued 3 Jun-1994 and maturity date 3 Jun years (Jute) Treasury Bond-22 bearing Issued 1 Jul-1995 and iv) 5 percent interest 1/ maturity date 1 Jul-22 1-years to 15-years (BPC) Treasury Bond v) bearing 5 percent interest 2/ 6-years (BPC) Treasury Bond bearing 7 vi) percent interest 9-years to 13-years BJMC Treasury Bond vii) bearing 5 percent interest 7-years SPTB-22 bearing 7 percent viii) interest 8-years SPTB-221 bearing 7 percent ix) interest 1-years SPTB-223 bearing 7 percent x) interest Issued 25 Sep-27 and Maturity date from 25 Sep-215 to 25 Sep- 222 Issued 26 Dec 211 and Maturity date 26 Dec- 217 Issued 23 Oct-211 and maturity date 23 October 22, 22 & 24 respectively Issued 29 June-213 and maturity date 29 June-22 Issued 29 June-213 and maturity date 29 June-221 Issued 29 June-213 and maturity date 29 June-223 To compensate for the liquidation of jute sector credit To compensate for the liquidation of jute sector credit To reimburse one-third of the debt due to jute mills' loan write-off by the private banks To repay the loan of Bangladesh Petroleum Corporation To repay the loan of Bangladesh Petroleum Corporation To repay the loan of BJMC To increase Government cash balance Sub-Total : (1+2+3) Prize Bond/Income Tax Bond Government's other Securities Advances to Food Ministry Advances to Other Ministries Advances to Auto/Semi-Autonomous Bodies Accrued Interest Deposits of Ministries and Departments (-) Deposits of Auto/Semi-Autonomous Bodies (-) SBs's Balances of GIIB Fund (i+ii) i) Investment to GIIB Fund ii) Borrowing from GIIB Fund (-) B Total : (4+ +13) Grand Total : (A+B)* 93, ,3543 9, ,8172 Including other deposits 1/ An amount of Tk 27 crore was paid in July 217 against the outstanding of Tk 89 crore in June 217 2/ An amount of Tk 1 crore was paid in September 217 against the outstanding of Tk crore in June 217 *Including GIIB Fund Source: Debt Management Department, Statistics Department, Bangaldesh Bank ( Figures of Treasury Bills and Bonds (Including Special Bonds) are collected from DMD)

7 Table-II: Government Borrowing (Net) from Other than Banks during July-September of FY18 Annex-2 (Taka in Crore) July-September 216 July-September 217 Sl Particulars Sale Repayment Net Sale Repayment Net No Principal Interest Sale Principal Interest Sale = (3-4) = (7-8) NSD Instruments 1 Defence Savings Certificate year Bangladesh Savings Certificate year Savings Certificate 4 Bonus Savings Certificate 5 6-month interest bearing Savings Certificate 6 Family Savings Certificate month interest bearing Savings Certificate Jamanat Savings Certificate 9 Pensioner Savings Certificate Post Office Savings Bank a) General Account b) Fixed Account c) Bonus Account 11 Postal Life Insurance Prize Bond Wage Earners' Development Bond year National Investment Bond US $ Premium Bond US $ Investment Bond Total : (1++15) Outstandings as on Net Outstandings as on Net September 216 Changes September 217 Changes 18 Govt Treasury Bills/Bonds i) Government Treasury Bills ii) Bangladesh Govt Treasury Bonds (BGTBs) a) 2-year Bangladesh Government Treasury Bonds b) 5-year Bangladesh Government Treasury Bonds c) 1-year Bangladesh Government Treasury Bonds d) 15-year Bangladesh Government Treasury Bonds e) 2-year Bangladesh Government Treasury Bonds Total Non-bank Government Borrowing (net) : (17+18) Sources : National Savings Directorate, Debt Management Department, BB