Badrul Ahsan :
The government’s net borrowing through national saving certificates in the July-February period surpassed its’ target for the entire financial year, sources said.
Money market experts and officials said, the higher yield rates attract the savers to invest their money in saving certificates.
They said, the sales of government savings certificates have been registering a healthy growth for months due to significant slash of interest rates by both the public and the private commercial banks.
The net sales of saving certificates stood at about Tk 187.29 billion in eight months of the fiscal year (FY) 2015-16 against the target of Tk 150.00 billion for the whole fiscal year, Department of National Savings (DNS) data showed.
The sales also increased by about 6.0 per cent during the period compared with that of corresponding period (FY 2014-15).
Officials at the DNS said that despite reduction of yield rates, the sales of savings certificates had been registering a healthy growth.
The government slashed the rates of yield by nearly 2.0 per cent on different savings certificates on May 23 last year.
They said the monthly net borrowing target from this sector is Tk 12.50 billion, but about Tk 20 billion is being invested every month.
If the trend of sales continues till the end of the current FY, the net borrowing may stand at more than Tk 200 billion which will be substantially higher than that of the fiscal target, the officials said.
According to the statistics of the DNS, following upward trend in sales of savings tools, the government’s interest payment in this sector rose by more than 14 per cent during eight months of this FY compared with the matching period of last fiscal.
The DNS data showed that the interest payment stood at around Tk 70.50 billion in the July-February of FY 2015-16, which was Tk 59.31billion in July-February period a year ago (FY 2014-15).
The gross sales stood at Tk 280.93 billion and encashment was Tk 114.90 billion during the period. Ayezuddin Ahmed, Director (admin) of the DNS, said that the investment in this sector already exceeded the entire fiscal target.
“But the government can revise the target if it wants. It depends on what its actual plan is with this sector,” he said.
Because of comparatively higher rates of yield on government savings instruments, savers still now prefer the tools like family savings and three monthly savings certificates, he said.
Currently, banks are offering about 7.0 to 8.0 per cent interest only on their fixed deposit schemes.
Besides, the rate of yield is 11.76 per cent on pensioner savings certificates, 11.52 per cent on family savings certificate, 11.28 on five-year Bangladesh savings certificate and 11.04 per cent on three-month savings certificate.
However, money market experts said, the government’s borrowing with a higher rate of interest is a suicidal for the development of the country.
“If the government does not borrow with such a high rate, then the banks and other financial institutions could lower interest on their lending and borrowings and with the lower interest would encourage private sector investment,” former governor of central bank, Dr Saleh Uddin Ahmed told The New Nation on Monday.
“Higher interest on saving tools will discourage investment in the country,” he said.
The government’s net borrowing through national saving certificates in the July-February period surpassed its’ target for the entire financial year, sources said.
Money market experts and officials said, the higher yield rates attract the savers to invest their money in saving certificates.
They said, the sales of government savings certificates have been registering a healthy growth for months due to significant slash of interest rates by both the public and the private commercial banks.
The net sales of saving certificates stood at about Tk 187.29 billion in eight months of the fiscal year (FY) 2015-16 against the target of Tk 150.00 billion for the whole fiscal year, Department of National Savings (DNS) data showed.
The sales also increased by about 6.0 per cent during the period compared with that of corresponding period (FY 2014-15).
Officials at the DNS said that despite reduction of yield rates, the sales of savings certificates had been registering a healthy growth.
The government slashed the rates of yield by nearly 2.0 per cent on different savings certificates on May 23 last year.
They said the monthly net borrowing target from this sector is Tk 12.50 billion, but about Tk 20 billion is being invested every month.
If the trend of sales continues till the end of the current FY, the net borrowing may stand at more than Tk 200 billion which will be substantially higher than that of the fiscal target, the officials said.
According to the statistics of the DNS, following upward trend in sales of savings tools, the government’s interest payment in this sector rose by more than 14 per cent during eight months of this FY compared with the matching period of last fiscal.
The DNS data showed that the interest payment stood at around Tk 70.50 billion in the July-February of FY 2015-16, which was Tk 59.31billion in July-February period a year ago (FY 2014-15).
The gross sales stood at Tk 280.93 billion and encashment was Tk 114.90 billion during the period. Ayezuddin Ahmed, Director (admin) of the DNS, said that the investment in this sector already exceeded the entire fiscal target.
“But the government can revise the target if it wants. It depends on what its actual plan is with this sector,” he said.
Because of comparatively higher rates of yield on government savings instruments, savers still now prefer the tools like family savings and three monthly savings certificates, he said.
Currently, banks are offering about 7.0 to 8.0 per cent interest only on their fixed deposit schemes.
Besides, the rate of yield is 11.76 per cent on pensioner savings certificates, 11.52 per cent on family savings certificate, 11.28 on five-year Bangladesh savings certificate and 11.04 per cent on three-month savings certificate.
However, money market experts said, the government’s borrowing with a higher rate of interest is a suicidal for the development of the country.
“If the government does not borrow with such a high rate, then the banks and other financial institutions could lower interest on their lending and borrowings and with the lower interest would encourage private sector investment,” former governor of central bank, Dr Saleh Uddin Ahmed told The New Nation on Monday.
“Higher interest on saving tools will discourage investment in the country,” he said.
