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 E-mail: mohammadabdul@bborgbd, arjinaefa@bborgbd & smsumon@bborgbd 1
-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 -3156-254 -127-316 -29-816 -1125-33 17 8779 126943 Taka in Crore Source: Debt Management Department, Statistics Department, Bangladesh Bank, National Savings Directorate, September 217 Govt domestic borrowing (net) stood at Tk 16816 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 134579 crore and Tk 19617 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 126943 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
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 42295 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 28172 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 134988 crore during July- September, FY18 As a result, govt borrowing (net) from the domestic sources during July-September, FY18 stood at Tk 16816 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 27763 crore (repaid Tk 85 crore to BB and borrowed Tk 9582 crore from SBs, Tk 4274 crore from non-bank) which is Tk 131766 crore lower than that of the month of August, 217 3
-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 32149 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 62824 crore On the other hand, the net borrowing with scheduled banks stood at Tk 34652 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)) -62824-28172 34652 134988 16816 2823 32149 6352 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 134988 crore of which Tk 126943 crore was borrowed through NSD instruments during July-September, FY18 The total net government domestic borrowings (banking and nonbanking sources) stood at Tk 16816 crore during July-September of FY18 which is 177 percent of total budget target 4
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
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 17 31 August 17 3 September 17 September 17 July-Sept 17 1 2 3 4 5 6 7 8=(7-6) 9=(7-5) A Bangladesh Bank To increase 1 Ways and Means Advances Government cash 3156 4-4 -3156 balance 2 Overdraft 18819-188186 3 Overdraft Block 5685 5685 5685 4 Devolvement 5311 4944 4944-98 a) Treasury Bills 8116 673 673-243 b) Treasury Bonds 42195 43331 43331 1136 5 Government Currency Liabilities 2263 2263 2263 6 Advances to Autonomous and Semi-autonomous Bodies 7 Accured Interest 184 713 837 124-247 8 Government Deposits @/ (-) -292-487 -22389-2192 -2297 9 BB's Balances of GIIB Fund (-) -29995-39959 -39412 547-9417 A Total : (1 ++ 9)* 12,8377 14,562 6,5553-8,5-6,2824 B Deposit Money Banks (DMBs) 1 Government Treasury Bills 235185 238264 235147-3117 -38 i) Treasury Bills (Less than 1 year) To increase Government cash 235185 238264 235147-3117 -38 balance 2 Bangladesh Govt Treasury Bonds (BGTB) 997585 987183 14981 17799 7397 i) 2-years Bangladesh GovtTreasury Bonds To increase long-term 7188 66291 69991 37-197 ii) 5-years Bangladesh GovtTreasury Bonds investment of different 24536 23933 24179 247-3957 iii) 1-years Bangladesh GovtTreasury Bonds banks, non-bank 387755 389413 392896 3483 5141 iv) 15-years Bangladesh GovtTreasury Bonds financial institutions and 162847 162644 166741 497 3894 v) 2-years Bangladesh GovtTreasury Bonds employees GF of different companies 13859 12982 134275 4473 3416 3 Others Treasury Bonds 119976 119949 118949-1 -127 a) 5 Years and above (Specialized Bonds) 119976 119949 118949-1 -127 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 339 339 339 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- 219 25-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 296 296 296 25 25 25 89 62 62-27 29225 29225 28225-1 -1 95 95 95 1792 1792 1792 2 2 2 2 2 2 19351 19351 19351 4 Sub-Total : (1+2+3) 1352746 1345395 135977 13682 6331 5 Prize Bond/Income Tax Bond 264 251 228-23 -36 6 Government's other Securities 35 4 38-2 3 7 Advances to Food Ministry 2911 4381 2882-1499 -29 8 Advances to Other Ministries 16575 18589 18243-346 1668 9 Advances to Auto/Semi-Autonomous Bodies 14158 1146 11674 214-2484 1 Accrued Interest 3453 4129 43556 2527 926 11 Deposits of Ministries and Departments (-) -26631-248625 -253961-5336 1234 12 Deposits of Auto/Semi-Autonomous Bodies (-) -38212-382469 -38148 989-1268 13 SBs's Balances of GIIB Fund (i+ii) 28165 3789 37266-624 911 i) Investment to GIIB Fund 82761 85486 81862-3624 -899 ii) Borrowing from GIIB Fund (-) -54596-47596 -44596 3 1 B Total : (4+ +13) 82871 827941 837523 9582 34652 Grand Total : (A+B)* 93,1248 97,3543 9,376-7468 -2,8172 Notes: @/ 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 29225 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)
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 1 2 3 4 5 6 = (3-4) 7 8 9 1 = (7-8) NSD Instruments 1 Defence Savings Certificate 7 9-7 2 2-2 2 5-year Bangladesh Savings Certificate 13924 3882 1411 142 15413 5661 2613 9752 3 3-year Savings Certificate 4 Bonus Savings Certificate 5 6-month interest bearing Savings Certificate 6 Family Savings Certificate 62567 14391 1472 48175 6243 18759 26536 41485 7 3-month interest bearing Savings Certificate 41232 1426 73 2726 57534 2371 13174 33833 8 Jamanat Savings Certificate 9 Pensioner Savings Certificate 11829 422 218 787 18638 3991 2766 14647 1 Post Office Savings Bank 32411 12475 317 19936 37132 15414 3433 21718 a) General Account 5532 3758 127 1774 785 496 16 2179 b) Fixed Account 26879 8717 2891 18162 347 158 3327 19539 c) Bonus Account 11 Postal Life Insurance 21 27 6-7 28 2 66 8 12 Prize Bond 21 118 25 92 185 75 54 11 13 Wage Earners' Development Bond 3119 325 834 2794 569 373 1258 5317 14 3-year National Investment Bond 3-3 2-2 15 US $ Premium Bond 84 69 4 16 59 2 7 57 16 US $ Investment Bond 926 478 15 448 747 726 334 21 17 Total : (1++15) 16652 51 29341 11651 195849 6895 5243 126943 Outstandings as on Net Outstandings as on Net September 216 Changes September 217 Changes 18 Govt Treasury Bills/Bonds 243291 2356 261697 845 i) Government Treasury Bills 33751 252 1783-423 ii) Bangladesh Govt Treasury Bonds (BGTBs) 239916 214 2599143 8468 a) 2-year Bangladesh Government Treasury Bonds 52368 55 33141-43 b) 5-year Bangladesh Government Treasury Bonds 591894-177 61125 3321 c) 1-year Bangladesh Government Treasury Bonds 997584 1536 157735 2859 d) 15-year Bangladesh Government Treasury Bonds 314492 824 389875 116 e) 2-year Bangladesh Government Treasury Bonds 442817 91 57367 1585 19 Total Non-bank Government Borrowing (net) : (17+18) 118856 134988 Sources : National Savings Directorate, Debt Management Department, BB