Headlines
External debt and repayment risk framed the week; banking eyes private NPL buyers.
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 stayed at 10% through the week; reserves' $36b lift is loan-built.
FX Reserves
WATCH
- ◆June CPI print for the 15% VAT pass-through into the next MPS
- ◆High-powered-money growth as the disinflation drag
- ◆Debt-service path after Khosru's 'major challenge' framing
RISK
- ▼Reserve build is loan-funded — net softer than the $36b gross
- ▼Reserve-money surge undercuts the disinflation path into June
- ▼Sticky non-food CPI at 9.09% blocks any cut
Banking
Capital still binds — 1.56% CAR, 844bp below floor; private NPL buyers eyed.
WATCH
- ◆Terms of the private bad-loan purchase scheme — pricing and capital relief
- ◆WB's $450m banking-reform conditionality
- ◆Bank-level Q1 2026 disclosures — write-off vs recovery split
RISK
- ▼CAR 844bp below floor — the solvency hole unmoved on the Sep 2025 read
- ▼Decade-low industrial growth feeds fresh default formation
- ▼Private buyers may clear NPLs at a discount that crystallises losses
Banking was not the week's biggest σ-mover, but it stayed the system's structural bind, and five sessions moved none of it: NPLs hold 32.26% on a 1.56% CAR (Capital Adequacy Ratio) — 844bp below the 10% floor, propped on write-off arithmetic, not cures. The week's one genuinely new lever is a plan to let private firms buy bad loans and take over companies — a market-based workout that could move NPLs off balance sheets, but at a discount that crystallises the loss and leaves the capital hole exactly where it sits. WB's $450m underwrites supervision and resolution, not recapitalisation; banks have already leaned on Tk 76,000cr of central-bank liquidity. With industry at a decade low feeding fresh defaults, the desk reads any equity bounce as sentiment, not solvency, and holds defensive until a recapitalisation plan — not a reclassification or a sale — lands.
FX & External
Reserves' $36b lift is borrowed; the mid held 122.75 against a 123.10 market.
External Flow Balance
Remittance held $3.43bn against May's $3.04bn trade gap — cover over the gap just $0.39bn; the mid held 122.75 all five sessions.
Pre-Eid inflows now past; the June–July seasonal dip lies ahead with reserves leaning on JICA money.
Treasury: reserves past $36b are JICA-borrowed — watch the June–July dip and $78.22b external-debt service against the same reserves.
WATCH
- ◆Market USD/BDT against the 122.75 mid — the spread is the gauge
- ◆June–July post-Eid remittance dip after the $3.43bn May print
- ◆External-debt service path after the 'major challenge' framing
RISK
- ▼Reserve build JICA-borrowed — net softer than $36b gross
- ▼External debt $78.22b raises FX service against thin reserves
- ▼Remittance clears the gap by just $0.39bn — one soft month from negative
FX carried the week's running thesis, and the headline still flatters the book. Reserves printed past $36b after a JICA disbursement — cover rebuilt on its face. It is not: the lift is borrowed, and the authorities conceded the other side this week — external debt at $78.22b, repayment a 'major challenge.' Gross reserves climb while the net claim climbs faster. Underneath, the account is unchanged — May's $3.04bn trade gap clears its $3.43bn remittance by just $0.39bn, the June–July post-Eid dip the near drain; import cover sits at 5.86 months. The mid held 122.75 all five sessions while the market traded near 123.10 — the spread is where pressure shows. The book stays defensive on sovereign-linked FX service; the debt-service line into FY27 is the call for Monday.
DSE Markets
No trading all week; DSEX holds its 21 Apr 5,257 print, tape stale.
DSEX Index
DSEX last printed 5,257 on 21 Apr — a full week of non-trading sessions left no fresh tape.
The tape is frozen at the 21 Apr 5,257 print; the reopen is the next read.
Equity desk: hold large-cap quality into the reopen — $78.22b external debt and $36b reserves are the repricing inputs.
WATCH
- ◆First session to reprice $78.22b external debt and $36b reserves at once
- ◆Bank-sector reaction to the private bad-loan-purchase plan and 1.56% CAR
- ◆Whether turnover clears BDT 1,000cr on the reopen
RISK
- ▼Bank-heavy index exposed to the 32.26% distressed-loan pile
- ▼Stale tape — the reopen reprices a full week in one session
- ▼Taka near 123.10 pressures import-dependent large-caps
T-Bonds & T-Bills
The front-end cut stuck all week; 91d 9.70%, the long end anchored.
BD Govt Yield Ladder
Front-end held its cut all week — 91d 9.70%, 182d 9.89%, 364d 9.93%, 5y 10.37%, 10y 10.24%, ~67bp under the earlier 10.91%.
The 91d held 9.70% across the last four reads; the 10y holds 10.24% since the post-budget rally.
ALCO: the front-end eases while the external account tightens — fund short, but margins compress; watch the first post-budget auction for supply.
WATCH
- ◆Whether the first post-budget auction extends the 91d cut below 9.70%
- ◆June CPI — non-food at 9.09% the risk to the front-end bid
- ◆FY27 supply as external debt holds $78.22b
RISK
- ▼FY27 deficit math re-steepening the curve as borrowing returns onshore
- ▼High-powered-money surge re-pricing inflation risk into the front-end
- ▼The rally compresses margins on short-funded ALM (Asset-Liability Management) books
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 through the week.
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 held its 9.70% cut; credit at 6.03% says capital, not the policy rate, binds.
WATCH
- ◆June CPI for the 15% VAT and high-powered-money pass-through
- ◆Non-food above 9% (9.09%) as the stickiness tell
- ◆Private credit at 6.03% — the 60-period low as the demand tell
RISK
- ▼High-powered-money surge undercutting the disinflation path into June
- ▼The uniform 15% VAT compounding the June CPI
- ▼Private credit at 6.03% signalling dead 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 nears 123.10
RISK
- ▼Post-Eid seasonal dip typical in June–July — cover already thin at $0.39bn
- ▼Informal-channel share widening if the spread passes 123.10
Commodities
Gold eased from above $4,200 to $4,042 on the week; LNG holds $15.
WATCH
- ◆LNG spot for June–August monsoon-demand pricing
- ◆Gold as a global risk-sentiment proxy near $4,042/oz
RISK
- ▼LNG spike on monsoon power demand lifting Petrobangla off-take costs
- ▼Gold strength signalling risk-off rotation that pressures EM flows
Fiscal
Debt repayment turned the week's risk; NBR's Tk 3.27tn run-rate stays flat.
NBR Tax Revenue
Monthly NBR revenue held flat all week — YTD collection steady at Tk 3.27tn, still trailing the Tk 4.15tn FY27 target.
The Tk 3.27tn YTD level has held across the last twelve reads — the pace is set, not accelerating.
Treasury/ALCO: a flat run-rate means the deficit leans offshore — external debt now $78.22b, repayment a 'major challenge.'
WATCH
- ◆External-debt service path after the 'major challenge' framing
- ◆First post-budget T-Bill auction — the deficit-financing mix in practice
- ◆EPB's $67b FY27 export target against a flat NBR base
RISK
- ▼Offshore tilt swaps domestic crowding for FX-denominated service as the runway thins
- ▼Execution shortfall pushes domestic bank borrowing higher into FY27
- ▼A tax base near the world's lowest caps domestic financing
Iran War & Oil
Brent held below $80 all week, closing $75.06; the import cushion holds.
Brent Crude
Brent held below $80 all week, closing $75.06 (+$1.95 Fri), WTI $71.50 — range-bound after the post-war slide.
Spot sits well under $80; the sub-$80 zone that underwrote FY27's pre-war oil math held all week.
Treasury: the import-bill cushion holds below $80 — watch the $80 line and the US-Iran deal's durability into the two-month window.
WATCH
- ◆The $80 line and whether the US-Iran accord holds past the two-month window
- ◆Oil pass-through into June CPI atop the 15% VAT
- ◆Import-bill drag against the $3.04bn trade gap and the taka near 123.10
RISK
- ▼A talks collapse re-arming the subsidy and import-bill tail
- ▼Hormuz-route risk to Bangladeshi cargo through the strait
- ▼FY27 projections under-provisioning if oil round-trips higher
Oil was the week's only real σ-mover, and it moved in Bangladesh's favour: Brent spent all five sessions below $80, closing $75.06 after a $1.95 Friday tick, with WTI at $71.50. That matters because the sub-$80 zone is the one that underwrote FY27's pre-war oil assumptions — the budget math survives intact, and a lighter import bill eases one genuine drain on an FX runway already leaning on JICA money and a $3.04bn May trade gap. But the relief is conditional, not structural: it rests on the US-Iran accord holding past its two-month window, and a break back above $80 would re-thicken the import bill straight into sticky non-food CPI at 9.09% and a taka pressured near 123.10. The desk banks the cushion but does not extrapolate it — watch the $80 line and the deal's durability as the swing factor into next week.
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