Meanwhile, under inflationary pressure, households are withdrawing more money from banks than they are depositing while cashing in savings certificates has increased.
Money flowed from the market to the central bank due to the sale of large amounts of dollars to banks that were short of supply, creating a liquidity crunch. Now banks are borrowing from each other to meet the demand for cash.
The government has set the domestic borrowing target for FY23 at Taka 1.46 trillion, including Tk 1.06 trillion from the banking system and Tk 350 billion from savings certificates.
Government domestic borrowing from the banking system increased during July-November of FY2023 as compared to the same period in FY2022.
It borrowed 320 billion taka, or 30 percent of the target, from the banking system in the July-November period, up from about 20 percent of the target in the same period last fiscal year.
On the other hand, net non-bank lending followed a slower growth during July-November of FY23 as compared to the same period of FY23, due to lower net sales of savings certificates, the central bank said in the report.
During July-November of FY23, net sales of national savings schemes fell by Tk 16.16 billion as against an increase of over Tk 10 billion in the same period of the previous financial year.
“Given the ongoing inflationary pressures in the economy, the government will have to step up borrowing from non-banking sources in the coming days,” Bangladesh Bank said.