Monthly Business Review- May 2019

During July-February of FY 2018-19, the net sale of National Savings Certificate (NSC) exceeded the target for the entire fiscal by 35%, already BDT 5,602.49 crore worth of NSCs sold against the target of BDT 26,197 crore. Deposit mobilization for the same period registered only 9.6% average growth. On the other hand, according to media reports, USD sale by Central Bank increased to a greater extent, to the tune of USD 1.87 billion in July to March of FY2018-19, whereas BDT 84 for USD 1 sale is being withdrawn from banking system.

Central Bank already took measures to address the liquidity situation, for instance, reducing the Cash Reserve Ratio (CRR) to 5.5%. However, sale of NSCs can only be ensured to those in need of social safety net. Also, it is high time Government should focus on money market (banking system) and capital market (bond) as alternative source of funding.