Dhaka, Jan. 10 -- Special bonds, issued to pay mainly fertiliser importers, formed the bulk portion of the government's domestic borrowing in FY24, according to official documents.

The government issued long-term fixed-income instruments - referred to as special bonds - and banks purchased those to release funds to fertiliser importers and power producers. These bonds, with maturities of seven to eight years, pay interest coupons to banks.

In total, the government issued special bonds of Tk 365.86 billion, accounting for 47 per cent of the funds raised through bonds during the 2023-24 fiscal year, as per Finance Division documents.

Banks borrowed from the Bangladesh Bank through these instruments, effectively leading to "money creation...