Business Report :
The net sales of national savings certificates further plunged in FY24 compared with that in the previous financial year due to high inflation and rising bank interest rates.
Bangladesh Bank data showed that net NSC sales were negative Tk21,124 crore in July-June of FY24 compared with that of negative Tk3,295 crore in the same period of FY23.
In June alone, the net sales dropped to negative Tk3,381 crore, contrasting with a negative Tk267 crore in June of the previous year.
This negative trend occurs when principal repayments exceed sales, leading to a net outflow of funds from the government’s exchequer or through loans from the banking system.
Bankers said that this trend reflected that people were relying on their savings amid acute and prolonged inflationary pressures.
Rising living costs have left many without extra funds for savings and investments, they said.
According to the Bangladesh Bureau of Statistics, the overall inflation hit 11.66% in July and has remained near 10% since March 2023.
The inflation in July was higher than the average 10.9% inflation calculated by the Bangladesh Bureau of Statistics 12 years ago in 2010-11.
Bankers said that people now preferred investing in government treasury bills and bonds due to their high-interest rate earnings, with treasury bill interest rates soaring to a record 12%.
The total outstanding investment in NSC reached Tk346,269 crore in July-June of FY24, down from Tk360,705 crore in the same period of the previous year.
To fund its activities this financial year, the government planned to borrow Tk18,000 crore by selling savings certificates in FY24.
In FY23, the government borrowed Tk80,858 crore against repayments of Tk84,154 crore in the period.
Amid economic crises, the government has prioritized repayment over further borrowing through these high-interest instruments.