Headlines
Budget revenue math under fire; sukuk and China funds open new financing lanes.
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 anchored at 10%; auctions, not BB, did the front-end easing.
FX Reserves
WATCH
- ◆First post-budget T-Bill auction — whether the offshore tilt curbs domestic supply
- ◆June CPI for the budget's VAT/tariff pass-through
- ◆Market USD/BDT against the 122.75 mid — the spread is the stress gauge
RISK
- ▼Reserve lift is loan-funded — net position softer than the gross $34.55bn
- ▼Sticky non-food CPI at 9.09% argues against a policy cut
- ▼June–July remittance dip thins the FX runway behind any easing
Banking
On the Q1 print, NPLs read 32.26% — but 1.56% CAR is the real bind.
WATCH
- ◆Bank-level Q1 2026 disclosures due June — the write-off-vs-recovery split
- ◆Whether any stressed lender tables a capital plan, not a reclassification
- ◆Forbearance creep — bespoke LC carve-outs that defer loss recognition
RISK
- ▼CAR 844bp below floor — solvency hole unmoved on the Sep 2025 read
- ▼Private credit stalled at 6.03% — transmission of any easing is dead
- ▼Forbearance reflex defers loss recognition rather than forcing triage
Banking is no longer the day's lead, but it remains the system's structural bind, and the Q1 2026 print is unchanged: NPLs at 32.26% rest on a CAR of 1.56% — 844bp below the 10% floor. The fall from the 35.73% peak is write-off arithmetic, not cures; the distressed pile behind it is unhealed. With functionally no capital, the sector cannot lend, and it shows in transmission — private credit growth stalled at 6.03% even as the post-budget curve rallied through 10%. That is the link to today's FX squeeze: a banking system that cannot intermediate leaves the external account to carry the adjustment alone. The desk reads any re-rating in a stressed name as sentiment, not solvency, and stays defensive on bank credit until a recapitalisation plan — not a reclassification — lands.
FX & External
Mid holds 122.75; May remittance covers the trade gap by just $0.39bn.
External Flow Balance
Remittance $3.43bn barely covers the $3.04bn May trade gap; the official mid holds 122.75 as cover over the gap thinned to $0.39bn.
Cover over the gap thinned to $0.39bn from $1.17bn a month earlier; pre-Eid inflow now past.
Treasury: the mid/market spread is the new stress gauge — watch the June–July remittance dip; reserves up but loan-funded.
WATCH
- ◆June–July seasonal remittance dip after the held $3.43bn May print
- ◆Market USD/BDT against the 122.75 mid — the spread is the stress gauge
- ◆Reserve durability as the FY27 budget tilts financing offshore
RISK
- ▼Remittance cover over the gap at $0.39bn — one soft month from negative
- ▼Reserve lift is loan-funded — net softer than the gross $34.55bn
- ▼Brent back above $81 lifts the import bill into a thinning runway
FX leads because the external account is now where the adjustment lands. The official mid is pinned at USD/BDT 122.75 while the market trades near 123.10 — the spread, not the fix, is the live stress gauge. The mechanism is thin: May's $3.04bn trade gap cleared its $3.43bn remittance by just $0.39bn, a cover that has collapsed from $1.17bn a month earlier, and the May remittance print is itself held. Reserves at $34.55bn flatter the picture — the lift is loan-funded, so the net line is softer than the gross. Two drains now converge: the June–July seasonal remittance dip with pre-Eid inflows past, and Brent back above $81 thickening the import bill. Import cover at 5.86 months leaves little runway. The desk reads the mid/market spread as the early-warning signal and stays defensive on import-line credit until cover over the gap rebuilds.
DSE Markets
Non-trading day; DSEX holds its 10 Jun 5,519.49 record.
DSEX Index
DSEX holds its 5,519.49 record (set 10 Jun) — no fresh print into a non-trading session.
The 10 Jun record stands above the prior 5,516.16 high; the tape has held flat since.
Equity desk: hold large-cap quality into the reopen — the taka slip and 32.26% NPL are the new inputs; sub-BDT 1,000cr turnover signals stalling.
WATCH
- ◆First trading session to price the FY27 budget frame and the NBR Tk 4.15tn target
- ◆Bank-sector reaction to the 32.26% Q1 NPL and 1.56% CAR (Capital Adequacy Ratio)
- ◆Whether turnover holds above BDT 1,000cr on the reopen
RISK
- ▼Record tape — stretched valuations if budget relief stalls
- ▼Bank-heavy index exposed to the distressed-loan pile
- ▼Taka near 123.10 pressures import-dependent large-caps
T-Bonds & T-Bills
The curve holds its post-budget rally — front-end below 10%, 10y at 10.24%.
BD Govt Yield Ladder
Curve holds its rally — 91d 9.85%, 364d 10.03%, 5y 10.37%, 10y 10.24%, ~67bp under the pre-budget 10.91%.
The 5y held 10.78% for two reads before the budget rally; the 364d now 10.03% vs 10.50% pre-budget.
ALCO: front-end easing while the external account tightens — fund short, but margins compress on short-funded books; watch supply at the first post-budget auction.
WATCH
- ◆First post-budget T-Bill auction — whether the offshore tilt durably curbs domestic supply
- ◆June CPI — non-food at 9.09% the risk to the front-end bid
- ◆Whether the 10y holds 10.24% or the long-end term premium rebuilds
RISK
- ▼FY27 deficit math pushing domestic borrowing back re-steepens the curve
- ▼Bull move compresses margins on short-funded ALM (Asset-Liability Management) books
- ▼Sticky non-food CPI at 9.09% re-steepens the curve if June prints hot
Macro & Inflation
On the Mar print, 12m-avg held 8.6% — lowest since Mar 2023; credit 6.03%.
CPI Trend
CPI 12m-avg held 8.6% on the Mar print — food 8.24%, non-food 9.09% — the disinflation read stalled.
12m-avg at lowest since Mar 2023 (8.4% then), but non-food at 9.09% keeps the average from falling.
MPC: disinflation stalled — yet the auction front-end eased again (91d 9.85%), and credit at 6.03% says capital, not the policy rate, binds demand.
WATCH
- ◆June CPI for the budget's VAT/tariff pass-through
- ◆Non-food above 9% (9.09%) as the stickiness tell
- ◆Import cover at 5.86mo as the taka holds near 123.10
RISK
- ▼Sticky non-food at 9.09% re-steepens the front-end if it persists
- ▼Budget VAT/tariff measures compound the June CPI
- ▼Private credit at 6.03% signals weak demand transmission
Remittance
Remittance held $3.43bn; cover over the $3.04bn gap stays thin into the dip.
Remittance Inflow
WATCH
- ◆June–July seasonal pattern — pre-Eid inflows now past
- ◆Whether the $3.43bn pace holds into the dip as the gap stays wide
- ◆Whether a kerb premium opens as the market rate nears 123.10
RISK
- ▼Post-Eid seasonal dip typical in Jun–Jul — cover already thin at $0.39bn
- ▼Informal-channel share widens if the market/official spread passes 123.10
Commodities
Gold steady near $4,173; LNG holds $15 on the stale 20 Apr print.
WATCH
- ◆LNG spot for Jun–Aug monsoon-demand pricing
- ◆Gold as a global risk-sentiment proxy near $4,173/oz
RISK
- ▼LNG spike on monsoon power demand lifts Petrobangla off-take costs
- ▼Gold strength signals risk-off rotation — an emerging-market capital-flow read
Fiscal
Deficit tilts offshore as NBR's Tk 4.15tn FY27 target meets a Tk 3.27tn run-rate.
NBR Tax Revenue
Monthly NBR revenue run-rate held flat — YTD collection steady at Tk 3.27tn, still trailing the new Tk 4.15tn FY27 target.
The Tk 3.27tn YTD level has held flat across the last twelve reads — the pace set, not accelerating.
Treasury/ALCO: a flat run-rate against a Tk 4.15tn target means the deficit leans offshore — watch the first post-budget auction mix.
WATCH
- ◆First post-budget T-Bill auction — the deficit-financing mix in practice
- ◆Outcome of the China GDI (Global Development Initiative) ask ($3.0bn) and the Tokyo lending-rate review
- ◆NBR enforcement against the Tk 4.15tn FY27 target
RISK
- ▼Execution shortfall pushes borrowing toward Tk 12.34tn by FY29
- ▼Offshore tilt swaps crowding for FX-denominated service as the runway thins
- ▼Tax-GDP near the world's lowest caps domestic financing
Fiscal is where today's FX squeeze is being written into next year's balance sheet. The FY27 frame leans the deficit offshore — Dhaka courts $3.0bn in China development funds, weighs joining the Global Development Initiative, and asks Tokyo to revisit a raised concessional rate. The domestic side is the constraint that forces the tilt: NBR's Tk 4.15tn FY27 revenue target sits against a run-rate stuck at Tk 3.27tn YTD, and economists already flag the lift as unrealistic. Govt bank borrowing holds BDT 1.25tn past the FY26 ceiling, so the offshore pivot is a release valve, not a choice. The cost is a swap — less domestic crowding now, more FX-denominated service into a runway already thinning at 5.86 months' import cover. The desk watches the first post-budget auction for the financing mix in practice.
Iran War & Oil
Brent rose to $81.45; the import-bill cushion thins further.
Brent Crude
Brent rose to $81.45, WTI $77.49 — up from $80.59 and still ~$30 under May's $111 peak.
The sub-$80 break has fully reversed; May's $111 peak now sits ~$30 above spot.
Treasury: the import-bill cushion thins as Brent holds above $80 — watch the $82 line and the US-Iran deal's durability into the two-month window.
WATCH
- ◆Whether the US-Iran accord holds Brent in the low $80s past the two-month window
- ◆Oil pass-through into June CPI after the budget's tariff measures
- ◆Import-bill drag against the $3.04bn trade gap and the taka near 123.10
RISK
- ▼A talks collapse re-arms the subsidy and import-bill tail
- ▼A further bounce lifts the import bill into sticky non-food CPI at 9.09%
- ▼FY27 projections under-provision if oil round-trips toward $90+
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