The government will borrow K1.3 trillion from the Central Bank of Myanmar (CBM) to plug the budget deficit for fiscal 2019-20, deputy minister for Planning and Finance U Maung Maung Win told Pyidaungsu Hluttaw on May 21.

This is expected to be around 20 percent of total borrowings to fund the deficit. It also indicates a further decline in CBM borrowing from 25pc over the past two fiscal years and over 50pc in 2016-17. Prior to that, the CBM funded the bulk of the country’s deficits.

The lower levels of CBM borrowing is in line with the country’s plan to reduce its reliance on central bank financing and more on bond financing.

Under the Budget Law for the fiscal year, the actual amount that the government can raise through borrowings, including bonds, shall not be more than K9 trillion.

Treasury bonds and treasury bills are auctioned once a month and twice a month respectively and the money raised is used to offset the budget deficit.

At those levels, the government will fund the deficit with a combination of 40pc bonds and 20pc from the CBM. The remaining will be raised through other borrowings, including foreign loans, U Maung Maung Win said.

The government is planning to borrow around K2.5 trillion from foreign sources, he said.