Finance Minister Amir Khasru Mahmud Chowdhury has stated that after taking office, the BNP-led government chose to repay the debt left by the interim government instead of resorting to money printing for borrowing.
He made the remarks during a pre-budget discussion organized by the Economic Reporters’ Forum (ERF) on Saturday at the Ministry of Finance.
Bangladesh Bank debt situation
Bangladesh Bank Governor Mostakur Rahman provided updated figures on government borrowing from the central bank:
“On 17 February, when the BNP assumed office, government borrowing from Bangladesh Bank under Wage and Means and overdraft stood at Tk 17,590 crore.
By 22 April, it had reduced to Tk 11,103 crore.”
He further added concerns regarding misinformation in the media.
Contradictory media report
According to media reports, PRI Chief Economist Ashikur Rahman had earlier claimed that:
“In March alone, the government borrowed Tk 20,000 crore from Bangladesh Bank, which is high-powered money (printed money), potentially increasing inflation.”
Governor’s clarification
Bangladesh Bank Governor rejected the claim of excessive money printing:
“Our country rating has declined, increasing both sovereign and private sector borrowing costs.
A report claiming that Tk 20,000 crore was printed in March is not correct.”
Bangladesh Bank’s position
Deputy Governor Habibur Rahman clarified the central bank’s role:
“In the last two years, Bangladesh Bank has not purchased any government treasury bills or bonds.
Government borrowing through Wage and Means and overdraft was Tk 27,601 crore in March, which has since been reduced by more than half as of 22 April.”
He further explained:
“Bangladesh Bank is the government’s bank. Government deposits and withdrawals continuously take place. There is no issue of printing money or destroying printed money. The key issue is whether currency in circulation is increasing.”
