The government is set to borrow an additional Tk5,000 crore through a special auction on Wednesday, as mounting fiscal pressure from weak revenue collection and rising spending needs forces it to lean harder on the banking system.
The Bangladesh Bank will hold the auction of 91-day treasury bills on April 1, adding to the government’s regular borrowing programme, officials involved in the process told TIMES.
“Special auctions are usually arranged when the government faces sudden or additional funding pressure beyond its regular borrowing plan,” said Md Ezazul Islam, director general of the Bangladesh Institute of Bank Management.
“In this case, the scale of the revenue shortfall has created a clear financing gap, making such an auction necessary to meet immediate expenditure needs.”
The move comes as revenue mobilisation continues to lag sharply. In the first eight months of the fiscal year, the National Board of Revenue missed its collection target by 28 per cent, creating a shortfall of Tk71,472 crore, according to provisional data.
Officials said the additional borrowing is being driven by increased spending linked to the ruling BNP’s election pledges, including the introduction of various benefit cards and waivers of agricultural loans.
“Spending commitments have risen while revenue has fallen short, creating immediate financing needs,” a central bank official said, requesting anonymity.
The government typically finances its deficit by issuing treasury bills and bonds, which are sold through the central bank to banks and other investors.
Recent auction data show that borrowing costs remain elevated. The yield stood at 9.78 per cent for 91-day treasury bills, 9.97 per cent for 182-day bills and 10 per cent for 364-day bills.
In the latest auctions, the government borrowed Tk 3,417 crore through 91-day bills, Tk 2,382 crore through 182-day bills and Tk 2,046 crore through 364-day bills.
Government borrowing from domestic sources has surged this fiscal year. In the first seven months, net borrowing reached Tk 80,251 crore, more than double the Tk 35,306 crore recorded in the same period a year earlier, central bank data show.
Of this, Tk 73,035 crore came from the banking system.
The budget for fiscal 2025-26 sets borrowing targets of Tk 104,000 crore from banks, Tk 21,000 crore from non-bank sources and Tk 96,000 crore from external financing.
