Cenbank to hold another Tk5,000cr special treasury bill auction amid rising govt demand
Bankers say the government is increasingly relying on the banking sector due to a revenue shortfall and rising expenditure pressures.
Bangladesh Bank is set to hold another special auction of Tk5,000 crore worth of 91-day treasury bills on 8 April, taking the total amount raised through such auctions in this month to Tk10,000 crore.
A senior central bank official confirmed the development to The Business Standard today (5 April), saying the move comes in response to the government's growing financing needs.
Bankers say the government is increasingly relying on the banking sector due to a revenue shortfall and rising expenditure pressures. At the same time, excess liquidity in banks has created room for such borrowing.
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A senior official from a private sector bank noted that banks had placed around Tk11,500 crore in the standing deposit facility (reverse repo) toward the end of last month, indicating surplus funds in the system. This has encouraged the central bank to mobilise funds from the market.
Additionally, Bangladesh Bank has been purchasing US dollars from commercial banks through auctions since the beginning of the fiscal year, further injecting liquidity into the banking system.
Another banker said the government had also resorted to off-calendar borrowing in the October-December quarter, raising around Tk10,000 crore to meet urgent funding needs.
Such off-calendar auctions typically signal immediate financing requirements, driven by various government initiatives, including social safety net programmes.
For the April-June quarter, the government plans to borrow Tk1.10 lakh crore in short-term funds through treasury bills. This includes Tk44,000 crore in 91-day bills, Tk36,000 crore in 182-day bills, and Tk30,000 crore in 364-day bills, to be auctioned in 12 weekly sessions.
In addition, the government aims to raise another Tk39,000 crore through treasury bonds of medium and long-term tenures.
Officials from the central bank's Debt Management Department said the auction schedule has been prepared based on the government's financing requirements. However, they noted that this borrowing does not reflect net new debt, as maturing bills and bonds are routinely rolled over through fresh issuances.
Meanwhile, private sector credit growth remains subdued at 6.03%, reflecting weak investment demand. With limited lending opportunities, banks are increasingly investing in government securities, which are considered risk-free.
