The government is issuing bonds to raise new sources of funds to finance its deficit. On November 15, it auctioned K500 billion worth of treasury bills with maturity periods ranging from 91 days to 364 days.

The day before, it issued K410 billion worth of treasury bonds with maturity periods of 2-4 years and a coupon rate of 9.5 percent.  

On October 25, it had also auctioned K200 billion worth of treasury bills. The coupon rates for 84-day bills and 182-day bills are 7.282pc and 8.55pc, respectively.

According to statistics from the Ministry of Planning and Finance, the fiscal deficit during  the two years of the incumbent government totaled K11.1 trillion, compared to K8 trillion accumulated by the previous government during its five-year term.

Myanmar’s fiscal deficit has been at its highest at around 4.5 percent of GDP for two consecutive years. To fund the budget and keep the deficit below 5pc of GDP, the government has borrowed extensively from the CBM. President U Htin Kyaw submitted a proposal to borrow further from the CBM at the Pyidaungsu Hluttaw last month.

According to the government, 40pc of the fiscal deficit in 2016-17 will be funded by borrowing from the central bank. That will decrease to 20pc in 2018-19 and from 2019-20, the plan is that no recurrent government spending will be funded by the central bank.

For now, the government still needs to borrow partially from the CBM with approval from the Pyidaungsu Hluttaw, vice governor of CBM U Soe Thein said at the Pyidaungsu Hluttaw.

Source: https://www.mmtimes.com/news/myanmar-auctions-treasury-bonds-and-bills-funds-cover-deficit.html