Headlines
Energy shortages drag equities to a 14-session low as fuel costs ripple through prices.
Food's Share of Spending Rises as Income Falls
An IMF chart, built on USDA data, plots food spending as a share of GDP against food's share of total consumer spending. Poorer economies sit further up and further right on both scales.
- ▸Advanced economies hold the bottom-left corner. Food takes roughly 5 to 22 percent of consumer spending in that group, on food outlays worth under about 13 percent of GDP.
- ▸Emerging markets spread across the whole middle of the chart. Their markers run from about 11 percent of consumer spending to above 40 percent, and the group overlaps the advanced cluster at one end and the low-income band at the other.
- ▸Low-income developing countries occupy the top-right. Every marker in that group sits above roughly 29 percent of consumer spending, and the highest of them approach 55 percent.
A household that already spends half its money on food has no cheaper category to move into, so a price rise comes out of everything else it buys. The IMF places Bangladesh in the low-income group at the upper right of this chart. Food and beverages carry the largest single weight in the Bangladesh CPI basket, which is the same fact seen from the other side.
Food inflation belongs in the credit process, not only in the macro commentary. A price move reaches disposable income before it reaches any borrower's file, and the thinnest-buffer books — retail, microfinance-linked exposure, small-ticket SME — feel it first. A risk team reading food prices only off the monthly CPI print is working from the slowest signal available.
Policy & Rates (Bangladesh Bank)
Corridor steady since July; ample liquidity keeps the overnight rate soft.
FX Reserves
Gross reserves climbed to $36.01bn by the Sep 2026 print from $33.19bn last December, with net reserves at $31.20bn.
Reserves recovered through 2026, now above the $33.18bn series low from earlier in the period.
Treasury: the reserve rebuild supports import-cover headroom; watch the next monthly print for direction.
WATCH
- ◆Whether overnight call money holds near the 7.50% SDF floor into month-end
- ◆The next monthly reserves print after Sep's $36.01bn
RISK
- ▼A liquidity reversal pushing call money toward the 11.00% SLF ceiling
- ▼Reserve drawdown if the import bill reaccelerates on higher fuel costs
Banking
On the Q2 2026 print, NPLs near 33% keep provisioning pressure structural.
Overnight Money Market
Overnight money-market rates fell to 7.65% by the 12 Oct print from above 10% in mid-April — a steep decline in bank funding costs.
The easing runs the full series, from mid-April 2026 to the 12 Oct print, more than 240bp off the April high.
Treasury: cheap overnight funding and the money-market slide point to ample liquidity; expect deposit and lending rates to follow lower.
WATCH
- ◆Q3 2026 NPL disclosure, due to update the Q2 print
- ◆Whether state-owned banks' share of the stock widens further
RISK
- ▼Provisioning shortfalls as the NPL stock stays near 33%
- ▼Capital erosion at the weakest banks given the stale 1.56% CAR read
NPLs at 32.78% on the Q2 2026 print describe a system where close to a third of loans are not performing, and the concentration matters more than the headline. The bulk of the stock sits with a small number of state-owned commercial banks, so the aggregate ratio overstates the strain at well-provisioned private lenders and understates it at the weakest. For a desk, that argues for name-level rather than sector-level credit limits — the system average is not the counterparty you face. The last CAR reading, 1.56% in the Q3 2025 print, is now 378 days old and too stale to anchor a current capital view; the next quarterly disclosure is the one to price against. Until it lands, position credit exposure on the assumption that loss-absorbing buffers at the weakest banks have not improved.
FX & External
Taka firm and reserves rebuilt, but the export read is a Jun print.
External Flow Balance
Monthly imports ran at $6.78bn in the Jul print against exports of $4.20bn in June, a persistent trade gap part-funded by remittance near $2.97bn.
Exports are up from $3.35bn a year earlier and imports above their $6.27bn year-ago level — both trending higher.
Treasury: the trade gap keeps FX demand firm; watch reserves and remittance to carry the import bill through higher fuel costs.
WATCH
- ◆The next monthly reserves print after Sep's $36.01bn
- ◆Updated export data to confirm the YoY pace beyond the June read
RISK
- ▼Reserve drawdown if the import bill reaccelerates on higher fuel prices
- ▼Taka pressure should the trade gap widen beyond the stale June export read
DSE Markets
A 14-session low on thin turnover as energy worries sap risk appetite.
DSEX Index
DSEX at 5,404.87 on the 12 Oct print sits just above a year ago (5,227.75), having ranged between 4,702.68 and 5,926.28 over the window.
The latest close marks a 14-session low (5,379.00 on 14 Sep the last lower close).
Equity desk: the index is barely above its year-ago level; watch the 5,379.00 September floor, then the 4,702.68 series low.
WATCH
- ◆Whether turnover recovers from BDT 452.81cr or the index drifts below the 5,379.00 September low
- ◆Energy-supply headlines for read-through to industrial earnings
RISK
- ▼Further equity weakness if gas and power shortages persist into Q4 reporting
- ▼Thin liquidity amplifying downside on any forced selling
The index closing at 5,404.87 on 12 Oct — a 14-session low (5,379.00 on 14 Sep the last lower close) — reads less like a valuation reset than a verdict on the real economy. Breadth tells the story: 303 stocks fell against 47 that rose, yet turnover was only BDT 452.81cr, so sellers are leaving rather than being forced out. The driver is operational, not monetary — gas and power shortages are crimping the margin outlook for manufacturers, and Brent near $106.55 adds to the fuel-cost squeeze. The usual support for equities is already present: T-bill cut-offs have fallen to between 7.65% and 7.89% and overnight rates sit near 7.65%, so the cost of capital is easing even as prices fall. Cheaper money will not lift this market until the energy constraint clears; stay underweight energy-exposed industrials and watch the 5,379.00 floor.
T-Bonds & T-Bills
Front-end yields down 48bp to 71bp at the 12 Oct auction; the long end lags.
BD Govt Yield Ladder
The 91d T-bill yield eased to 7.65% by the October monthly point from 8.73% in August; the 5y fell to 8.65% from 9.35%.
The decline runs across all tenors over the three monthly points since August 2026 — a broad curve shift lower.
Treasury: front-end yields fell while the 15y and 20y firmed to near 9.34%; position for a steeper curve.
WATCH
- ◆The next T-bill auction for confirmation of the front-end move below 8%
- ◆Fresh long-bond prints to update the stale 9 and 16 September reads
RISK
- ▼A funding-cost reversal if liquidity tightens from current ample levels
- ▼Weak private credit demand keeping banks over-weighted in government paper
The front end has repriced hard: 91d, 182d and 364d cut-offs fell to 7.65%, 7.75% and 7.89% at the 12 Oct auction, down 48bp to 71bp in a single round. The driver is liquidity — overnight rates near 7.65% and call money at 7.67% leave banks with cash to deploy, and with private credit weak the easiest home is government paper. The monthly series shows the same slide, the 91d down from 8.73% in August to 7.65% by the October read. The long end has lagged: the 5y and 10y sit at 8.65% and 8.54% on the 9 and 16 September prints, so the curve has steepened at the margin and duration still carries a pickup. The move is as much a demand story as a policy one — if credit appetite returns, the front end could give some of this rally back. Position for a steeper curve while the liquidity glut holds.
Macro & Inflation
12-month CPI down to 8.65% on the Sep print; private credit still soft.
CPI Trend
The 12-month average CPI eased to 8.66% as of the Jul 2026 chart point, down from 9.77% a year earlier and off the 10.34% series high.
The series sits at its lowest since May 2026 (8.6% then), down from the 10.34% peak.
ALCO: an easing 12-month CPI with a positive 1.16% real policy rate supports a hold; non-food inflation stays the sticky risk.
WATCH
- ◆The October CPI print for confirmation of the disinflation trend below 8.65%
- ◆Whether private credit growth recovers from the 4.98% August read
RISK
- ▼Non-food inflation at 9.32% keeping the real-rate squeeze on borrowers
- ▼Rapid M2 at 11.76% feeding back into prices if credit demand returns
Remittance
A provisional Sep flash of $2,770mn, down on the month but up year-on-year.
Remittance Inflow
Remittance ran at $2,967.53mn as of the Aug 2026 chart point, within a 12-month range of $2,562.4mn to $3,755.1mn.
Inflows are up from $2,685.6mn a year earlier, holding well off the $3,755.1mn series high.
Treasury: remittance remains a steady FX source above its year-ago level; watch the confirmed September print against the provisional $2,770mn flash.
WATCH
- ◆The confirmed September remittance print to firm up the provisional $2,770mn
- ◆Whether inflows hold above the year-ago $2,685.6mn into Q4
RISK
- ▼A sustained monthly slide below $2,770mn pressuring the external funding mix
- ▼Formal-channel inflows softening if the spread to kerb rates widens
Fiscal
NBR collection flat at BDT 4.15tn; the borrowing read is a June print.
NBR Tax Revenue
Monthly NBR tax revenue reached BDT 28,027cr as of the Oct 2025 print, up from BDT 26,555cr a year earlier.
The series spans July 2023 to the Oct 2025 print, ranging between BDT 21,478cr and BDT 52,720cr.
Fiscal: revenue momentum is modest; a soft collection trend pressures the deficit and keeps government borrowing a swing factor for bank liquidity.
WATCH
- ◆Fresh NBR monthly collection to update the BDT 4.15tn YTD figure
- ◆Updated government borrowing data beyond the June BDT 0.94tn read
RISK
- ▼A borrowing step-up crowding bank liquidity if revenue undershoots targets
- ▼Revenue shortfall widening the deficit against the budget
Iran War & Oil
Brent holds near $106.55, close to its recent high — import-bill pressure persists.
Brent Crude
Brent rose to $106.55 by the 12 Oct print from $85.44 in mid-July, a climb of about 25% that pushed it near the $108.35 window high.
Over the window since mid-July 2026 Brent has ranged from a $78.34 low to the $108.35 high.
Risk: crude near cycle highs lifts the fuel import bill; watch energy-sector receivables and non-food inflation pass-through on the next refi cycle.
WATCH
- ◆Whether Brent breaks the $108.35 window high or eases back toward $85
- ◆Energy import LC volumes after September's 22% YoY rise
RISK
- ▼A sustained Brent move above $108 widening the import bill and reserve drain
- ▼Fuel-cost pass-through feeding non-food inflation already at 9.32%
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