Headlines
FY27 opens with exports slipping, reserves firming, and the capital hole still binding.
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 held 10% all week; BB's model still overshoots its FY27 ceiling.
FX Reserves
WATCH
- ◆June CPI print for the 15% VAT and high-powered-money pass-through into the FY27 MPS
- ◆The new AD-bank rate-hedging tools and whether an onshore IRS market takes hold
- ◆Gross reserves net of JICA against the post-Eid remittance dip
RISK
- ▼Model overshoot signalling no easing window through FY27
- ▼Reserve build loan-funded — net thinner than the $34.55bn gross
- ▼The spread cap and 4 sick NBFCs straining a thin-capital sector
Banking
Capital hole held all week — 1.56% CAR, 844bp below floor; profits fell 44%.
WATCH
- ◆Bank-level Q1 2026 disclosures — the write-off vs recovery split
- ◆Income mix shift to fees and government-paper carry as the spread cap bites
- ◆BB's 7-point bad-loan plan and the 3-month clock on 4 sick NBFCs
RISK
- ▼CAR 844bp below floor — the solvency hole unmoved on the Sep 2025 read
- ▼Corporate profits down 44% seeding the next NPL vintage
- ▼Spread cap compressing margins atop a 6.03% credit book
Banking stayed the system's structural bind all week, and nothing in five sessions moved it: NPLs held 32.26% on a 1.56% CAR (Capital Adequacy Ratio) — 844bp below the 10% floor, propped on write-off arithmetic, not cures. Two signals sharpened over the week. First, the earnings engine keeps bending: banks no longer make most of their money from lending, the spread cap pushing income to fees and government-paper carry precisely when thin-capital banks need internal capital generation. Second, the demand side deteriorated — listed corporate profits fell 44% as inflation and the energy crisis bit, seeding the next NPL vintage. BB's 7-point bad-loan plan and the 3-month clock on four sick NBFCs are triage, not repair. Entering next week the book stays defensive: this is a solvency hole no reclassification closes, and recapitalisation is the only re-rating catalyst.
FX & External
Mid held 122.85 all week; reserves crossed $33bn but FY26 exports slipped.
External Flow Balance
Remittance held $3.43bn against May's $3.04bn trade gap — cover just $0.39bn; the mid held 122.85 all week, net reserves crossed $33bn.
Pre-Eid inflows now past; the June–July post-Eid dip lies ahead as reserves lean on ITFC, JICA and WB money.
Treasury: the managed crawl is paused, not done — watch the post-Eid dip and FY27's offshore-tilted debt service against rented reserves.
WATCH
- ◆Whether the new BB chief resumes the mid's walk toward the ~123 market
- ◆The post-Eid remittance dip after May's $3.43bn print
- ◆FY27 external-financing pricing as ITFC, JICA and WB tranches carry the runway
RISK
- ▼Reserve build rented — net thinner than the $34.55bn gross
- ▼Remittance clears the gap by just $0.39bn — one soft month from negative
- ▼FY26 exports slipping as offshore-tilted financing stacks the FX service line
FX carried the week's thesis, and the gauge barely twitched: BB held the mid at USD/BDT 122.85 across all five sessions, the managed crawl paused after last week's 10-paisa walk toward a market near 123. The pause is a choice, not a floor — the new chief's contraction is as much a currency defence as an inflation one. The headline flattered: net reserves crossed $33bn, a milestone, but the build is rented — ITFC's fresh $3.3bn fertiliser-and-fuel line funds the import bill offshore, propping reserves while stacking the FX service line. The account beneath is unchanged: FY26 exports slipped despite June's $4.2bn rebound, and May's $3.04bn trade gap clears its $3.43bn remittance by just $0.39bn — one soft, post-Eid month from negative. The book stays defensive on sovereign-linked FX service; the FY27 debt-service line is the call.
DSE Markets
Tracked DSEX frozen at 5,257 all week; the bourse closed FY26 up 19%.
DSEX Index
Tracked DSEX frozen at April's 5,257 across a non-trading week; the bourse closed FY26 up 19%, press reporting the index back above 5,700.
Tracked feed holds 21 Apr's 5,257 across the week's non-trading sessions; the 19% FY26 rally is reform-led, banks leading.
Equity desk: treat the tracked 5,257 as a data lag — FY27's reopen reprices a bank-heavy index on a 1.56% sector capital ratio.
WATCH
- ◆Reconciliation of the tracked 5,257 feed to the reported post-FY26 level
- ◆Bank-sector tone given the 1.56% capital ratio and the spread cap
- ◆Whether FY27 turnover confirms the 19% FY26 breakout or fades it
RISK
- ▼Bank-heavy index exposed to the 32.26% distressed-loan pile
- ▼A reform-led rally outrunning a 1.56% sector capital ratio and a 44% profit fall
- ▼Stale tracked tape masking the true repricing
T-Bonds & T-Bills
Front-end held 9.44% all week; excess liquidity underwrites the bid into FY27 supply.
BD Govt Yield Ladder
Front-end held its cut all week — 91d 9.44%, 364d 9.74%, 182d 9.71%; the 10y anchored 10.24%, ~67bp under the earlier 10.91%.
The 91d has held 9.44% for four reads after stepping down from 9.6985%; the 10y unmoved across the window.
ALCO: the front-end stays easy as the external account tightens — fund short, but margins compress; watch the first FY27 auction for supply.
WATCH
- ◆Whether the first FY27 auction extends the 91d cut below 9.44%
- ◆June CPI — non-food at 9.09% the risk to the front-end bid
- ◆FY27 gross supply as bank-borrowing overshoots the revised FY26 ceiling
RISK
- ▼FY27 deficit math re-steepening the curve as borrowing returns onshore
- ▼The new chief's contraction re-pricing the front-end if liquidity tightens
- ▼The rally compressing 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.
12m-avg at lowest since Mar 2023 (8.4% then), but non-food at 9.09% keeps the average from falling.
MPC: BB's model now sees FY27 CPI over ceiling, keeping policy tight — yet the front-end cut to 9.44% says capital, not rates, binds.
WATCH
- ◆June CPI for the 15% VAT and high-powered-money pass-through
- ◆Non-food above 9% (9.09%) as the stickiness tell
- ◆BB's model overshoot against the DCCI's easing pressure
RISK
- ▼The uniform 15% VAT compounding the June CPI
- ▼Private credit at 6.03% signalling dead demand as profits fall 44%
- ▼The new chief's contraction deepening the credit-demand hole
Remittance
Remittance held $3.43bn; cover over the $3.04bn gap stays thin into the post-Eid 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
- ◆The BKB-over-Islami channel shift and any kerb premium as the mid holds 122.85
RISK
- ▼Post-Eid seasonal dip typical in June–July — cover already thin at $0.39bn
- ▼Informal-channel share widening if the official-market spread widens
Commodities
Gold surged to $4,137 this week on a risk-off bid; LNG held $15.
WATCH
- ◆Gold as a global risk-sentiment proxy — the $4,137 bid and any pullback
- ◆LNG spot for June–August monsoon-demand pricing
- ◆Whether the risk-off rotation pressures EM and frontier flows
RISK
- ▼Gold strength signalling risk-off rotation that pressures EM flows and the BDT
- ▼LNG spike on monsoon power demand lifting Petrobangla off-take costs
- ▼A safe-haven bid coinciding with the post-Eid remittance dip
Commodities carried the week's biggest σ-move, and it ran against the grain: gold surged to $4,137 from near $4,026 to open the week — a decisive risk-off bid even as Brent eased to $71.61 and WTI to $68.48. The divergence is the read. Oil easing is a clean tailwind for a frontier importer — the FY27 import-bill cushion stays open below $80. But a gold rally this steep is a global rotation to safety, and for a thin-reserve managed-float economy that is a headwind: it pressures EM and frontier flows just as the post-Eid remittance dip nears and net reserves have only crossed $33bn on rented money. LNG, quiet at $15 on a stale 20 Apr tape, is the next off-take pressure once monsoon power demand builds. Bank the oil relief; treat gold's climb as the risk warning it is.
Fiscal
Revenue hit Tk 4.2tn, narrowing the gap; bank-borrowing overshot the FY26 ceiling.
NBR Tax Revenue
Monthly NBR revenue stepped up — YTD collection lifted to Tk 3.61tn from a Tk 3.27tn plateau as year-end receipts land.
The Tk 3.27tn YTD level held across the prior ten reads — this is the first move off the plateau.
Treasury/ALCO: even as the run-rate lifts and revenue hits Tk 4.2tn, the FY27 deficit still leans offshore — external borrowing over domestic.
WATCH
- ◆FY27 revenue mix under the acting NBR chairman
- ◆Whether the Tk 3.61tn NBR run-rate sustains into FY27 collection
- ◆External-financing pricing as the FY27 deficit leans offshore
RISK
- ▼Bank-borrowing overshooting even its revised FY26 ceiling
- ▼A tax base near the world's lowest capping collection against target
- ▼Offshore tilt swapping domestic crowding for FX-denominated service
Iran War & Oil
Brent eased to $71.61, WTI $68.48; the import cushion held below $80 all week.
Brent Crude
Brent eased to $71.61 (WTI $68.48) across the week, extending the post-war slide and holding well below $80.
Spot roughly flat on last week's $71.18 close, still well below $80 — the zone underwriting FY27's pre-war oil math holds.
Treasury: the import-bill cushion stays open 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 mid at 122.85
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
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