Financial Repression Tracker

Rules that steer savings into government debt or hold returns below inflation, country by country.

Hold · Central bank financing

Automatic deficit financing through Treasury bills

What it is
Treasury bills are created for the central bank whenever government balances fall short, or repeatedly discounted as the routine residual source of budget finance.
Why it counts
Budget shortfalls automatically generate monetary liabilities instead of forcing tax increases or market borrowing.

When it was in force

  • India: 1997, historical; the rule may be older than the cited document
  • Germany: 1919 → 1921, historical; the rule may be older than the cited document; its end is not documented

2 examples

  1. India

    1997Historical

    The rule may be older than the cited document · As cited: before 1 April 1997

    Ad hoc bills automatically monetised central-government deficits until the practice was discontinued in 1997.

    Ad hoc Treasury-bill financing practice; Government–RBI arrangements replaced by Ways and Means Advances in April 1997Primary source
    “automatic monetisation of the Central Government budget deficit through ad hoc Treasury Bills”

    rbi.org.in (opens in a new tab)Checked: quote matched on the page by script

    India today: index 60.6

  2. Germany

    1919 → 1921Historical

    The rule may be older than the cited document · Its end is not documented · As cited: 1919-1921 (documented episode)

    The Finance Ministry repeatedly issued bills for Reichsbank discounting as expenditure exceeded receipts after the war.

    Reich Treasury-bill discounting practice at the ReichsbankSecondary source
    “the Finance Ministry has resorted to the expedient of issuing Treasury bills for the Reichsbank to discount.”

    fraser.stlouisfed.org (opens in a new tab)Checked: quote confirmed on the page by a reviewing agent

    Germany today: index 45.2

Examples and their dates reviewed .

Further reading

7 more on central bank financing