The government raises the rates on all types of savings certificates by as much as 2.64% effective from 1 March in order to increase its borrowing from non-bank sources. For your information, the borrowing target of the government from the banking system in FY12 has already exceeded. Because of this action, the budgetary cost of the government will surely increase; however, it will ensure the smooth money supply in the banking system. The high rates on savings certificate will also ensure more investments in government-owned saving instruments which were previously unattractive due to higher deposit interest rates in the banking system.
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