Headlines
IMF backstop returns as May exports slip 7% and tariffs rise.
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)
Policy rate holds 10% on the Apr MPS; easing room thin.
FX Reserves
WATCH
- ◆Next MPS date and forward rate guidance
- ◆SDF utilisation as the excess-liquidity tell
- ◆Q1 2026 bank disclosures — due June
RISK
- ▼Real policy rate +1.29% thins if the power-tariff hike lifts CPI
- ▼Reserves print lagging — last refreshed 1 Apr
Banking
NPL holds 35.73% on the Sep print; CAR 844bp below floor.
WATCH
- ◆Q1 2026 bank-level disclosures — due June
- ◆Whether the next print extends the Tk 31,487cr quarterly jump
- ◆Any BB recapitalisation roadmap for state lenders
RISK
- ▼CAR 844bp below floor implies open-ended forbearance
- ▼Power-tariff hike and Brent at $97.09 squeeze corporate debt-service capacity
The credit cycle here is not turning — it is compounding behind a held print. The ratio has read 35.73% for quarters and CAR 1.56% leaves the system 844bp short of the 10% floor, a solvency hole only forbearance keeps off the front page. The fiscal channel pulls the other way: government bank borrowing has run to BDT 1.25tn, past its full-year ceiling, drawing scarce capacity toward the sovereign and away from a private-credit pulse already subdued at 6.03% YoY. A fresh power-tariff hike, now confirmed across the board, and Brent back at $97.09 press corporate debt-service capacity at the same time. The desk holds no fresh state-lender or stressed-private exposure and treats the Q1 2026 disclosures, due June, as the only near-term catalyst that can move the call — until then the 35.73% is a floor on the problem, not a ceiling.
FX & External
Anchored at 122.75; IMF backstop offsets a 7% May export slip.
External Flow Balance
USD/BDT flat at 122.75; remittance $3.13bn covers the $2.26bn trade gap, reserves hold $35.11bn even as May exports slip 7%.
USD/BDT unmoved since the April band reset; reserves on the 4 Jun read, remittance held at the $3.13bn print.
Treasury: remittance still funds the gap, but May exports -7% and Brent at $97.09 are fresh drains — watch import-payment timing.
WATCH
- ◆IMF programme size and conditionality timeline
- ◆June–July seasonal remittance dip on reserve cover
- ◆Brent pass-through into post-Eid import-payment lines
RISK
- ▼May exports -7% narrows the surplus cushion
- ▼Brent at $97.09 and the power-tariff hike widen the import bill
DSE Markets
DSEX breaks to 5,441 on BDT 1,279cr turnover; breadth 243/98.
DSEX Index
DSEX up 0.66% to 5,441.66 — turnover surges ~40% to BDT 1,279cr, breadth 243/98; the post-Eid breakout extends on volume.
Clears the 31 May post-Eid base of 5,336 and yesterday's 5,372; turnover above BDT 900cr for a third session.
Risk/equity desk: volume confirms the base — add while turnover holds above BDT 900cr; watch the power-tariff hike on consumer counters.
WATCH
- ◆Whether turnover holds above BDT 900cr to confirm the base
- ◆Front-end T-Bill cut-offs at the next auction
- ◆Consumer counters against the confirmed power-tariff hike
RISK
- ▼Thin post-holiday float can still exaggerate moves
- ▼Brent at $97.09 and the tariff hike pressure consumer-counter margins
The breakout earned its volume. DSEX pushed to 5,441.66, +0.66% — but the tell is participation: turnover jumped ~40% to BDT 1,279cr and breadth blew out to 243/98. This is not thin-float drift; it is money rotating in. The driver is the front-end step-down — the 91d T-Bill has held its lower step at 10.15% since late April and the curve sits near-flat through 10y at 10.91%, so the discount on equity cash-flows has eased while bank deposits pay less. Cheaper short money is finding the board. The check is cost-push: Brent back at $97.09 and a power-tariff hike now confirmed across the board squeeze consumer-counter margins into the next CPI print. The desk stays constructive on the index while turnover holds above BDT 900cr — but trims cost-sensitive consumer counters while that leg stays armed.
T-Bonds & T-Bills
Front-end at 10.15%; curve near-flat at 10.91% — fiscal pace the risk.
BD Govt Yield Ladder
91d T-Bill 10.15%, 364d 10.50%; curve near-flat through 10y at 10.91%, the 5y–10y spread just 13bp.
Short-end stepped lower since late April — 91d off 10.17%, 364d off 10.65%; the curve flat for a fifth read.
ALCO: front-end easing supports roll-down and equity multiples — watch the FY27 budget borrowing pace, now BDT 1.25tn, for reversal risk.
WATCH
- ◆Next auction sizes for the demand signal
- ◆Govt bank-borrowing pace into the FY27 budget
RISK
- ▼Fiscal crowding as borrowing runs to BDT 1.25tn
- ▼Flat curve compresses NIM on ALM (Asset-Liability Management) books
Macro & Inflation
CPI 12m-avg 8.6% on the Mar print; power-tariff hike a forward risk.
CPI Trend
CPI 12m-avg eased to 8.6%, food 8.24%, non-food 9.09% — disinflation intact but the non-food leg stays sticky above 9%.
CPI 12m-avg at lowest since Mar 2023 (8.4% then); non-food lowest since Feb 2026 (9.0% then).
MPC: a confirmed power-tariff hike and Brent at $97.09 are cost-push risks — watch the Apr CPI print before any easing tilt.
WATCH
- ◆Apr 2026 CPI print from BBS for disinflation confirmation
- ◆Power-tariff and oil pass-through into the next read
- ◆Private-credit trajectory — 6.03% YoY is subdued
RISK
- ▼Power-tariff hike and Brent at $97.09 reverse food-led disinflation
- ▼Non-food above 9% constrains MPC easing flexibility
Remittance
Remittance holds $3.13bn, covering the trade gap; seasonal dip the watch.
Remittance Inflow
WATCH
- ◆June–July seasonal pattern — pre-Eid inflows now past
- ◆May print confirmation from BB
- ◆Gulf labour-policy shifts affecting worker headcount
RISK
- ▼Post-Eid seasonal dip typical in Jun–Jul
- ▼Informal-channel share widens if a kerb premium opens
Commodities
Gold eases to $4,474/oz; LNG $15/MMBtu on the Apr print — monsoon the watch.
WATCH
- ◆LNG spot for Jun–Aug monsoon-demand pricing
- ◆Gold as a global risk-sentiment proxy
RISK
- ▼LNG spike on monsoon power demand lifts Petrobangla off-take costs
- ▼Gold weakness signals risk-on rotation, a firmer dollar
Fiscal
Govt bank borrowing past ceiling at BDT 1.25tn; FY27 budget due June.
WATCH
- ◆FY27 budget — due June 2026
- ◆NBR collection pace against the full-year target
- ◆IMF programme conditionality on the deficit path
RISK
- ▼Private-credit crowding-out as the sovereign competes for bank funding
- ▼Borrowing past ceiling pressures the T-Bill curve into FY27
The sovereign's funding pull has stepped up into budget week. Government bank borrowing has run to BDT 1.25tn — past its full-year ceiling with a quarter of FY26 still to go, a BDT 0.33tn jump from the BDT 0.92tn that already breached the cap. NBR collection has climbed to BDT 3.27tn, but the revenue path still trails, so the gap keeps landing on bank balance sheets. That is the credit-cycle link: every taka the state pulls from a system carrying a 35.73% NPL ratio and CAR 844bp below floor is a taka not extended to private credit, already subdued at 6.03% YoY. The politics confirm the squeeze — the PM has directed dropping the wealth tax and money-whitening window, while the IMF clears a fresh programme that will price the deficit path. The desk reads the FY27 budget, due June, as the binding catalyst — watch the deficit-financing mix for how much more falls on the banks.
Iran War & Oil
Brent climbs to $97.09; cost-push re-arms into the next CPI print.
Brent Crude
Brent climbs to $97.09, WTI $95.30 — up ~$2 on the day, back toward $100 and ~$14 below the May $111 peak.
Up from the $95.16 prior print; the slide toward $90 has reversed, the May $111 peak still ~$14 above.
Treasury: crude firming re-arms cost-push and lifts the dollar fuel bill — watch a $100 retest and the next CPI print.
WATCH
- ◆A $100 retest as the next threshold
- ◆Oil pass-through into the next BBS CPI print
- ◆OPEC+ June production decision
RISK
- ▼Crude firming through the mid-$90s widens the import bill
- ▼Renewed supply premium if the ceasefire frays
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