Headlines
Ctg port floods hit supply chains; SMEs press for credit relief.
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)
Overnight call money easy at 9.56%, but 14-day term money bid to 11.19%.
FX Reserves
WATCH
- ◆June CPI for the 15% VAT pass-through into the FY27 MPS
- ◆Whether 14-day money holds near the 11.50% SLF ceiling as the post-Eid dip drains liquidity
- ◆The dollar-buying pause — does it hold 122.85 or cede toward ~123
RISK
- ▼Term-liquidity squeeze pushing 14-day rates through the SLF ceiling
- ▼Reserve build loan-funded — net thinner than the $34.55bn gross
- ▼BB model overshoot signalling no repo window through FY27
Banking
On the Q1 print, the capital hole holds as SMEs press for credit.
WATCH
- ◆Bank-level Q1 2026 disclosures — the write-off versus recovery split
- ◆The fiscal cost of the five-bank depositor backstop against the FY27 budget
- ◆SME credit access as owners press for cost and regulatory relief
RISK
- ▼CAR 844bp below the 10% floor — solvency hole unmoved on the Sep 2025 read
- ▼The next NPL vintage building as private credit sits at 6.03%
- ▼Depositor backstop shifting resolution cost onto the sovereign
Banking remains the system's structural bind, and today's news names its demand side. 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 by write-off arithmetic, not recoveries. Around that hole the credit machine is seizing: SME owners pressed the government twice for cost and regulatory relief, a listed firm's factory sits shuttered, and private credit is stalled at 6.03% — a 60-period low. 'The banks that transformed are winning' tells the bifurcation in miniature: clean-capital banks pull away while thin-capital SCBs (State-Owned Commercial Banks) starve the borrowers who most need term credit. The state's exit — making five banks' depositors whole — converts private losses into a fiscal liability on the austerity budget. Recapitalisation, not a cleaner vintage, is the re-rating catalyst; the book stays defensive.
FX & External
Remittance holds $2.82bn under the $3.04bn trade gap; cover stays negative.
External Flow Balance
Remittance holds $2.82bn versus the $3.04bn trade gap; the 122.85 mid held as BB kept dollar buys paused.
Pre-Eid inflows are past; the June–July post-Eid dip persists into a second read, holding cover negative.
Treasury: one more soft remittance print turns the current account structurally negative — watch whether BB's pause holds 122.85.
WATCH
- ◆The next monthly remittance print — a second soft month confirms the post-Eid dip is a trend
- ◆Whether BB's dollar-buying pause holds 122.85 or cedes toward ~123
- ◆Wheat imports at a record high — the food-import bill against a thinning buffer
RISK
- ▼Cover negative — remittance $2.82bn under the $3.04bn trade gap
- ▼Reserve build rented and now paused — net thinner than the $34.55bn gross
- ▼A record wheat-import bill widening the goods deficit
DSE Markets
DSEX holds 5,804 (+0.6%), breadth positive; top 10 firms now 40% of value.
DSEX Index
DSEX holds 5,804.06, +0.6% on the session; turnover Tk1,428cr, advancers leading decliners 214:116.
Holds the 9 Jul reopening close of 5,804; today's session adds positive breadth and Tk1,428cr turnover.
Equity desk: treat 5,804 as the standing mark — with 10 firms at 40% of value, index gains mask thin genuine breadth.
WATCH
- ◆Whether 5,804 holds with breadth positive as turnover sustains above Tk1,400cr
- ◆Concentration risk — 10 firms at 40% of market value narrows depth
- ◆The growing list of non-operational listed firms after AFC Agro's closure
RISK
- ▼Bank-heavy index exposed to the 32.26% distressed-loan pile
- ▼Concentration — 10 firms at 40% of value thins genuine breadth
- ▼Non-operational listed firms signalling governance and disclosure gaps
T-Bonds & T-Bills
Front-end holds the cut — 91d 9.33%, curve steep with the 10y at 10.24%.
BD Govt Yield Ladder
Front-end holds its cut — 91d 9.33%, 182d 9.57%, 364d 9.63%; the 10y unmoved at 10.24%, curve steep.
The 91d has cut twice off 9.70% — through 9.44% to 9.33% — versus the 10y unmoved at 10.24% across the window.
ALCO: front-end stays easy on excess liquidity — fund short, but 14-day money at 11.19% warns term funding is tightening.
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
- ◆14-day term money at 11.19% — a term-liquidity signal against the front-end rally
RISK
- ▼FY27 deficit math re-steepening the curve as borrowing returns onshore
- ▼A liquidity drain re-pricing the front-end if the post-Eid dip tightens funding
- ▼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.
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 and today's SME reform pleas
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 at 5.86mo — lowest since Feb 2026 (5.3 then) — as the buffer thins
Macro is where the credit-cycle diagnosis sits, and the Mar–Feb prints make the mechanism plain. Disinflation has stalled — the 12m-avg CPI held 8.6%, lowest since Mar 2023 (8.4% then), but non-food is sticky at 9.09% and the uniform 15% VAT still has to pass through June's print, keeping BB's model above ceiling and policy pinned at 10%. Yet the binding constraint is not the price of credit but its absence: private credit growth is stuck at 6.03%, a 60-period low, even as the front-end T-Bill has been cut to 9.33% on excess liquidity. Rates are easing at the margin while lending is not — transmission is broken on the capital side, not the rate side. Today's SME reform pleas and the shuttered listed factory are the real-economy symptoms of the same seizure. Real policy rate at 1.29% leaves little room to ease into demand; the fix is recapitalisation and confidence, not a repo cut.
Remittance
Remittance holds $2.82bn under the $3.04bn trade gap; cover stays negative.
Remittance Inflow
WATCH
- ◆The next monthly print — whether $2.82bn is a one-month post-Eid dip or a trend
- ◆June–July seasonal pattern — pre-Eid inflows now past
- ◆Any kerb premium as the mid holds 122.85 and BB pauses dollar buys
RISK
- ▼Cover negative — $2.82bn remittance under the $3.04bn trade gap
- ▼Post-Eid seasonal dip typical in June–July, now persisting
- ▼Informal-channel share widening if the official-market spread widens
Commodities
Gold eased to $4,104 from $4,129; LNG holds $15 on a stale tape.
WATCH
- ◆Gold as a global risk-sentiment proxy — the pullback off $4,129
- ◆LNG spot for June–August monsoon-demand pricing
- ◆Whether the safe-haven bid returns into EM and frontier flows
RISK
- ▼Gold re-firming — a renewed safe-haven bid pressures EM flows and the BDT
- ▼LNG spike on monsoon power demand lifting Petrobangla off-take costs
- ▼Oil round-tripping toward $80 lifting the energy-import bill
Fiscal
NBR YTD holds Tk3.61tn; the tax net widens to foreign digital firms.
NBR Tax Revenue
Monthly NBR collection holds Tk3.61tn YTD — lifted off the Tk3.27tn plateau as year-end receipts landed, flat since.
The Tk3.61tn level has held since stepping off the Tk3.27tn plateau; no new monthly print this window.
Treasury/ALCO: even as the run-rate holds, offshore-tilted FY27 financing and the new digital-tax net keep the funding side the risk.
WATCH
- ◆Whether the foreign-digital tax net lifts the FY27 revenue mix materially
- ◆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 its revised FY26 ceiling at Tk1.25tn
- ▼Offshore tilt swapping domestic crowding-out for FX-denominated service
- ▼A flood-driven spending call reopening the deficit from the expenditure side
Iran War & Oil
Brent steady at $76.01, WTI $71.41 — the import cushion holds off $80.
Brent Crude
Brent holds $76.01 (WTI $71.41), steady off last week's $78.98 and below the $80 line.
Spot has held the $76 area off last week's $78.98 — the $80 zone underwriting FY27's pre-war oil math stays off.
Treasury: the import-bill cushion holds — a genuine offset to the persisting post-Eid remittance dip; watch the US-Iran accord.
WATCH
- ◆The $80 line and whether the US-Iran accord holds the range
- ◆Oil pass-through into June CPI atop the 15% VAT
- ◆Import-bill drag against the $3.04bn trade gap and the 122.85 mid
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
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