Headlines
ADB and HSBC mark FY27 growth to ~4.5% as Q1 FDI falls 70%.
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% through the week; the front-end cut again on excess liquidity.
FX Reserves
WATCH
- ◆June CPI for the 15% VAT and high-powered-money pass-through into the FY27 MPS
- ◆Whether the next FY27 auction extends the front-end cut below 9.33%
- ◆Gross reserves net of ITFC, JICA and WB against the post-Eid remittance dip
RISK
- ▼BB model overshoot signalling no repo-easing window through FY27
- ▼Reserve build loan-funded — net thinner than the $34.55bn gross
- ▼Spread cap straining thin-capital banks into FY27
Banking
Capital hole held all week; the state now backstops five banks in full.
WATCH
- ◆Bank-level Q1 2026 disclosures — the write-off versus recovery split
- ◆The fiscal cost of the five-bank depositor backstop
- ◆BB's bad-loan resolution plan against the Q1 32.26% print
RISK
- ▼CAR 844bp below the 10% floor — the solvency hole unmoved on the Sep 2025 read
- ▼Depositor backstop shifting resolution cost onto the sovereign balance sheet
- ▼The next NPL vintage building as private credit sinks to 6.03%
Banking stayed the system's structural bind all week, and five sessions moved none of it: NPLs at 32.26% sit on a 1.56% CAR (Capital Adequacy Ratio) from the Sep 2025 read — 844bp below the 10% floor, held up by write-off arithmetic, not cures. The state's chosen exit hardened into a number: depositors of five troubled banks get their money back in full — a sovereign backstop, not a bank cure, converting private losses into a fiscal liability that lands on the same austerity budget the FX desk watches lean offshore. ADB's FY27 downgrade to 4.5% named banking strain as a drag; private credit at 6.03% says the demand that seasons the next vintage is dead, while the spread cap starves internal capital where thin-capital banks need it. The book stays defensive: recapitalisation, not a cleaner vintage, is the re-rating catalyst — and the bill now has a number.
FX & External
Mid pinned at 122.85 through the week; a $4bn capital surplus still cushions.
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 as net reserves stay past $33bn.
Pre-Eid inflows now past; the June–July post-Eid dip lies ahead as reserves lean on offshore ITFC, JICA and WB credit.
Treasury: the crawl is paused, not done — watch the post-Eid dip and Brent's $80 line against FY27's offshore-tilted debt service.
WATCH
- ◆Whether the new BB chief resumes the mid's crawl toward the ~123 market
- ◆The post-Eid remittance dip after May's $3.43bn print
- ◆Brent's $80 line — a break re-thickens the import bill on 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
- ▼Brent near $79 pressing the $80 FY27 oil-math line
DSE Markets
The DSE tape reopened live at 5,804, well above the tracked April 5,257.
DSEX Index
DSE tape reopened live at 5,804, +0.59% with 214 advancers to 116 — the first genuine session since April's frozen 5,257.
The tracked feed had held 21 Apr's 5,257 across every non-trading session since; this is the first live reconciliation.
Equity desk: treat the jump as a feed catch-up, not a rally — the live 5,804 reprices a bank-heavy index on a 1.56% sector CAR.
WATCH
- ◆Whether the 5,804 live level holds through next week's sessions
- ◆Bank-sector tone given the 1.56% capital ratio and the spread cap
- ◆Foreign flows and turnover depth after the reopening
RISK
- ▼Bank-heavy index exposed to the 32.26% distressed-loan pile
- ▼Reopening breadth fading if turnover thins from Tk1,428cr
- ▼Intech-style junk reclassifications as a governance tell on thin names
The story in equities this week was the tape itself: after sitting frozen at April's tracked 5,257 across every non-trading session, the DSE returned live at 5,804 — a broad session, 214 advancers to 116 decliners on Tk1,428cr turnover. Treat the gap between the tracked 5,257 and the live 5,804 as a feed reconciliation, not a one-week rally; what is genuine is the breadth and the volume — the first real liquidity read in months. The catch is what the tape must now price: a bank-heavy index carrying a 1.56% sector CAR (Capital Adequacy Ratio) — 844bp below the floor — and a 32.26% distressed-loan pile, with ADB this week naming banking strain a drag on FY27 growth. The desk should welcome the live print, not the composition. Confirm the 5,804 holds through next week before adding — the reopening is a data event, the solvency bind is the position.
T-Bonds & T-Bills
Front-end cut across the curve this week — 91d to 9.33% on excess liquidity.
BD Govt Yield Ladder
Front-end cut across the curve this week — 91d to 9.33% from 9.44%, 182d 9.57%, 364d 9.63%; the 10y unmoved at 10.24%.
The 91d has now cut twice off 9.6985 — through 9.4399 to 9.33% — vs the 10y unmoved at 10.24% across the window.
ALCO: the front-end stays easy as the external account tightens — fund short, but margins compress; watch the next FY27 auction for supply.
WATCH
- ◆Whether the next FY27 auction extends the 91d cut below 9.33%
- ◆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
- ▼A liquidity drain re-pricing the front-end if the external account tightens
- ▼The rally compressing margins on short-funded ALM (Asset-Liability Management) books
Macro & Inflation
On the Mar prints, 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: BB's model sees FY27 CPI over ceiling, keeping policy tight — yet the front-end at 9.33% 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
- ◆Private credit at 6.03% against the FY27 easing debate
RISK
- ▼The uniform 15% VAT compounding the June CPI print
- ▼Private credit at 6.03% — a 60-period low — signalling dead loan demand
- ▼Import cover easing to 5.86mo as the external buffer thins
Remittance
Remittance held $3.43bn all week; cover over the $3.04bn gap stays thin.
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
- ◆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 eased to $4,086 from $4,187 over the week; LNG held $15.
WATCH
- ◆Gold as a global risk-sentiment proxy — the pullback from $4,187
- ◆LNG spot for June–August monsoon-demand pricing
- ◆Whether the risk-off unwind sustains into EM and frontier flows
RISK
- ▼Gold still elevated — any renewed safe-haven bid pressures EM flows and the BDT
- ▼LNG spike on monsoon power demand lifting Petrobangla off-take costs
- ▼Oil's climb toward $80 lifting the energy-import bill
Fiscal
NBR YTD held Tk3.61tn all week; financing still leans offshore for FY27.
NBR Tax Revenue
NBR YTD collection held Tk3.61tn through the week — lifted off the Tk3.27tn plateau as year-end receipts landed, steady since.
The Tk3.61tn level has held since stepping off the Tk3.27tn plateau; no new monthly print to reconcile this window.
Treasury/ALCO: even as the run-rate holds, a Tk4,731cr customs miss and offshore-tilted FY27 financing keep the deficit's funding side the risk.
WATCH
- ◆FY27 revenue mix under the new NBR chief's trade-facilitation push
- ◆Whether fresh spending curbs hold the FY27 deficit as revenue misses
- ◆External-financing pricing as ITFC, Chinese and multilateral credit carry the deficit
RISK
- ▼Bank-borrowing overshooting even its revised FY26 ceiling at Tk1.25tn
- ▼ADB's FY27 downgrade to 4.5% pressuring the revenue base further
- ▼Offshore tilt swapping domestic crowding-out for FX-denominated service
Iran War & Oil
Brent up $6.85 on the week to $78.98 — the import cushion narrows toward $80.
Brent Crude
Brent climbed +$6.85 over the week to $78.98 (WTI $74.54), from $72.13 — the post-war range breaking toward the $80 line.
Spot ran from $72.13 toward $80 this week — the zone underwriting FY27's pre-war oil math now within a dollar.
Treasury: the import-bill cushion is closing — a break above $80 re-thickens the drain on a rented FX runway; watch the US-Iran deal.
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 above $80
Oil was the week's biggest genuine mover, and it moved the wrong way for a thin-reserve importer: Brent ran +$6.85 over five sessions to $78.98, from $72.13, with WTI tracking to $74.54 — the post-war range breaking toward the $80 line that underwrites FY27's pre-war oil math. Held flat on Friday, the level still sits within a dollar of the threshold where the import bill re-thickens and the subsidy tail re-arms. For the FX desk this lands directly on a rented reserve build — $34.55bn gross, net past $33bn, propped by offshore ITFC and multilateral credit — and on a current account one soft month from negative: May's $3.04bn trade gap clears $3.43bn remittance by just $0.39bn. The book stays defensive on sovereign-linked FX service; a break above $80 feeds non-food CPI still at 9.09% and pressures the FY27 debt-service line already tilting offshore. Watch the $80 line and the US-Iran accord into next week.
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