The government borrowed Tk 19,055 crore from banks in just ten days this month, the last of the outgoing fiscal year, as the typical end-of-year scuffle to finish the annual development programme begins.
It has long become a culture that the pace of development works picks up in the closing month of the fiscal year, with the government's bank borrowing rising as well, putting a pressure on the money market.
Until June 9, the government's bank borrowing for the fiscal year stood at around Tk 6,359 crore against the revised target of Tk 29,982 crore. However, on June 19 it shot up to Tk 25,414 crore.
In the 11 months of the fiscal year, the ministries spent only Tk 39,982 crore, which is 67 percent, of the revised ADP allocation, according to the Implementation Monitoring and Evaluation Division.
In other words, only Tk 3,934 crore was spent each month on average during the July-May period, meaning Tk 20,000 crore has to be spent in the last month to meet the revised target.
Meanwhile, since the banks are sitting on excess liquidity this time, the government's hasty borrowing is unlikely to affect the money market much.
On May 1, the banks' excess liquidity stood at Tk 102,223 crore.