The sale of savings certificates has slumped in the first two months of the current fiscal year thanks to a tightening grip on the sale, low interest and people’s low saving capacity amid mounting inflation.
The sale dipped by 14.29 times to only Tk 4.02 billion during the July-August period in the current fiscal year from Tk 57.33 billion in the first two months of FY22, according to the latest data from the Department of National Savings (DNS).
In contrast, the government sold Tk 36.29 billion worth of savings tools in August 2021 and Tk 21.04 billion in July last fiscal.
The government has set a target of borrowing Tk 350 billion from savings certificates in the ongoing FY23.
The net sale stood at Tk 199.16 billion last fiscal year against the targeted amount of Tk 320 billion.
The government’s total loans taken through savings certificate sales now stand at Tk 3,644.11 billion, according to DNS data.
The government has to pay 11 percent interest on the savings tools on average, which is much higher than the interest rate paid on bank loans.
The government also curtailed the interest rate by 2 percentage points from late September last year for investments over Tk 15 lakh.
Besides, people are also enchasing their saving certificates before maturity because of higher living costs due to raging inflation.
Economic analysts say people’s saving capacity has been eroded by the high cost of transport, education, treatment and essential commodities.
They said the income of people has declined in two years of the corona pandemic, when many people have gone to their village home after losing jobs while some faced cut in their salaries.
The fresh impact of the Russia-Ukraine war has aggravated the situation. Imported inflation has caused huge suffering to the people with the free fall in taka’s value against the US dollar, they explained.