Govt has BoB support for deficit funding

BoB's support clear the way for finalisation of a bond issuance programme and eventual tabling before the winter Parliament which sits from July. Government also plans  to draw down on its reserves in funding the deficit arising in the 2010/11 budget.

While Government's caps and policies on domestic borrowing entitle it to raise the entire deficit from the local market, analysts - including the International Monetary Fund - have cautioned that this could crowd out other players in the capital market through factors such as higher interest rates and lower liquidity.