The sale of saving certificates has kept increasing as it crosses the fiscal target of Tk20,000 crore in the first eight months.
So far, saving certificates worth Tk29,311 crore have been sold, according to the Bangladesh Bank.
However, the net sale of the saving instrument fell in February by about Tk2,000 crore compared to January. Its net sale was worth Tk3,609 crore in February which was Tk5,210 crore in January.
Economist and chairman of the research institute PRI Dr Zaidi Sattar said it would be a challenge for the government to maintain the balance of the macroeconomy as the sales of savings certificates have increased more than the target.
He told The Business Standard that the government would have to pay extra interests on the sale of additional savings certificates but the revenue income is much less than the target in the budget.
As a result of a decrease in income on one hand and the decline of the income, on the other hand, the government has to cut the development expenditure. The government will have to increase spending in areas where employment is created, including the health sector during the Covid-19 period.
The economist said the government could take loans from banking sources, sell saving certificates or avail direct loans from the Bangladesh Bank, as domestic sources to meet the budget deficit. However, the cost of borrowing from these sources is high. So, the government has to try to get a relatively low-interest rate foreign loan.
Meanwhile, the government is not taking loans from banks as the implementation of the development budget is less due to the impact of Covid-19. On the other hand, many government expenditures have been reduced with Covid-19 in mind, which has given the government some relief from the pressure of spending.
During the eight months of July-February, the annual development programme was implemented at Tk72,603 crore, which is about 34% of the total allocation.
However, during the same period last fiscal, the implementation figure was Tk80,143 crore, which was just over 37% of the total allocation.
In the seven months of July-January of the last financial year, where the government borrowed more than Tk50,000 crore from the banking system, it did not borrow at the same time of the current financial year rather repaid more than Tk4,000 crore of the previous loan.
Zaidi Sattar said the government would not be able to stop the sale of savings certificates even if it wanted to – mainly because of the implementation of 9-6 interest rate in the banking sector. The interest rate that is now available on bank deposits is negative considering inflation. As a rule, ordinary savers will lean towards high-interest savings certificates.