Finance ministry sources said borrowing went down as $308 million was available from the World Bank (WB) as development support credit.

The total borrowing of the government on June 30, 2003 was Tk 19,062 crore, which fell to Tk 18,378 crore on August 31.

The government's borrowing from the Bangladesh Bank also decreased by Tk 2,775 crore during the period. However, its borrowing from the commercial banks increased by Tk 2,091 crore.

Bangladesh Bank sources said as a prudent monetary approach, the government borrowed from the commercial banks, which were straddled with excess liquidity, to reduce borrowing from the central bank.

Finance ministry sources said by encashing the WB credit, some Tk 1,800 crore was deposited to the government account. This reduced the need for borrowing.

Moreover, during the first few months of the fiscal, the annual development programme snails, which also reduces the need for funds.

At the same time, the government's revenue collection improved during the first two months of the fiscal. During July-August, the collection crossed the target by Tk 21 crore. This also helped the government meet its expenditures from own source.

The current budget has set the borrowing from the banks at Tk 2,603 crore.