The Brief.

The stance did not move — 10% since the April MPS — but Bangladesh Bank made two live decisions that matter more than the policy line. First, the money market: overnight call money at 9.56% sits comfortably inside the 7.50–11.50% corridor, confirming that liquidity, not the repo rate, sets the front-end — the same excess that cut the 91d T-Bill to 9.33%. Second, and newer, BB has stopped buying dollars to skip exchange-rate volatility, pausing the reserve build to defend the 122.85 mid. That is a choice with a cost: the $34.55bn gross reserve figure — already loan-tilted, net past $33bn on the 1 May print — loses its accretion channel just as the post-Eid remittance dip lands. The desk reads it as defence of the peg over reserve accumulation. Hold the front-end long; watch whether the pause survives the June CPI print and the thinning current-account cover.

Banking remains the system's structural bind, and no new print has moved it: NPLs at 32.26% on the Q1 2026 read sit atop a 1.56% CAR (Capital Adequacy Ratio) from Sep 2025 — 844bp below the 10% floor, held up by write-off arithmetic, not recoveries. The state's chosen exit has hardened into policy: depositors of five troubled banks are to be made whole with interest — a sovereign backstop, not a bank cure, that converts private losses into a fiscal liability landing on the same austerity budget the FX desk watches lean offshore. ADB's FY27 downgrade to 4.5% names banking strain explicitly; 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 most need it. The book stays defensive: recapitalisation, not a cleaner vintage, is the re-rating catalyst — and the bill now has a number.