Headlines
IMF trims FY27 growth to 3.5%; apparel exports slide as firms borrow offshore.
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 holds 10%; call money firmed midweek then eased — 14-day back to 9.50%.
FX Reserves
WATCH
- ◆Whether the 14-day's ease to 9.50% holds or the drain re-firms into August funding
- ◆June CPI for the 15% VAT pass-through into the FY27 MPS stance
- ◆The next FY27 T-bill auction against a 5y that just rallied 69bp
RISK
- ▼A re-firming front-end re-pricing short-funded ALM (Asset-Liability Management) books
- ▼Reserve build loan-funded — net thinner than the $34.55bn 1 May gross
- ▼Offshore financing tilt loading external-debt service atop the rate stack
Banking
On the Q1 print the capital hole holds; forbearance now reaches NBFIs.
WATCH
- ◆Al-Arafah handback terms — recapitalisation by former owners or tail migration back
- ◆The IMF bad-loan review's write-off-versus-recovery condition against the reform timeline
- ◆How far the NBFI one-time-exit forbearance masks fresh recognition
RISK
- ▼CAR 844bp below the 10% floor — the solvency hole unmoved on the Sep 2025 read
- ▼Forbearance widening to NBFIs deferring recognition system-wide
- ▼An offshore-financed FY27 budget raising the cost of the state-bank backstop
Banking is the system's structural bind, and this week the resolution model moved while the capital stayed put. On the Q1 2026 read NPLs hold 32.26% atop a 1.56% CAR from Sep 2025 — 844bp below the 10% floor, carried by write-offs, not cures. Against that, BB returned Al-Arafah to its former owners and then handed NBFI borrowers a one-time exit, having already done so for banks. The week's signal is forbearance, not repair: recognition deferred across lenders as the IMF bad-loan review, the forensic audit of five merged banks, and the Tk1.89tn state-bank pile still await resolution accounting. The room to recapitalise narrows as FY27 financing tilts offshore and the IMF trims FY27 growth to 3.5% — hard-currency debt service loading onto the budget that must carry the state-bank backstop. The trade is unchanged: only fresh capital re-rates the book. The book stays defensive until the recap lands.
FX & External
USD/BDT pinned a seventh session at 122.85; flows clear but Brent tops $85.
External Flow Balance
Trade gap held $1.77bn with exports $4.03bn and remittance $2.82bn — the external flows still clear the narrower gap, cover positive.
Remittance has held $2.82bn since the post-Eid step-down from $3.43bn — a third month clearing the $1.77bn gap.
Treasury: watch Brent above $85 and the offshore-financing tilt re-price the runway even as flows clear the gap.
WATCH
- ◆Whether BB holds the 122.85 mid or lets it crawl as Brent's climb re-widens the import bill
- ◆Jan–May RMG export slide feeding through to the export line that clears the gap
- ◆IMF disbursement pace against reserves still rented at $34.55bn
RISK
- ▼Brent above $85 and the northern-Iran escalation re-arming the import bill
- ▼Reserve build rented — net thinner than $34.55bn gross, financing offshore
- ▼Apparel export weakness eroding the surplus that clears the trade gap
DSE Markets
DSEX ground to a new high of 5,926 on the week, but breadth flipped negative.
DSEX Index
DSEX rose to 5,926.28, +0.25% Friday and up ~2.1% on the week; DS30 2,243, but turnover thinned to Tk1,516cr and decliners led 218:131.
Sixth print off the 9 Jul reopen (5,804) — up ~2.1% since, now a fresh high on thinning depth.
Equity desk: 5,926 holds as the mark, but negative breadth and sub-Tk1,600cr turnover flag narrowing leadership.
WATCH
- ◆Whether 5,926 holds or the negative breadth (131:218) drags the index next week
- ◆Turnover sustaining above Tk1,600cr — it slipped to Tk1,516cr Friday
- ◆Concentration — a handful of large-caps carrying the index to the high
RISK
- ▼Bank-heavy index exposed to the 32.26% NPL pile and 1.56% sector CAR
- ▼Breadth divergence at the high — 131 advancers to 218 decliners
- ▼A consolidation vulnerable to a single large-cap reversal
Equities were the week's optical winner and its clearest divergence. DSEX ground to a new post-reopen high of 5,926, up ~2.1% from the 9 Jul reopen at 5,804, DS30 to 2,243. But the internals told the other story: turnover thinned to Tk1,516cr from Tk1,651cr and breadth flipped negative on Friday, 131 advancers to 218 decliners, even as the headline printed green. A rising index on falling participation is a narrowing-leadership signal — a few large-caps carrying the tape while the median stock fades. Underneath sits the bind: a bank-heavy index repricing against a 1.56% sector CAR and the Tk1.89tn state-bank pile, with the Al-Arafah handback and fresh NBFI forbearance adding governance noise. The equity desk read: 5,926 is the mark, but treat the high as fragile — fund exposure with care and watch whether turnover reclaims Tk1,600cr next week.
T-Bonds & T-Bills
The 5y repriced 69bp lower to 9.68%, flattening below the 10y; T-bills held.
BD Govt Yield Ladder
The 5y repriced 69bp lower to 9.68%, below the 10y (10.24%); 91d held 9.17%, 182d 9.40%, 364d 9.57% — the belly rallied, T-bills flat.
The 5y held 10.37% for 13 straight prints before dropping to 9.68% below the 10y — the first belly move this window.
ALCO: the belly rally flattens the 5s10s — mark the gain but treat it as provisional until the next FY27 auction.
WATCH
- ◆Whether the next FY27 auction confirms the 5y's 69bp rally or fades it
- ◆June CPI — non-food at 9.09% the risk to the front-end bid
- ◆Whether offshore corporate financing lightens onshore FY27 gross supply
RISK
- ▼A lone 5y print at 9.68% reversing if the next auction re-steepens the belly
- ▼FY27 deficit math re-steepening the curve if borrowing stays onshore
- ▼The belly rally compressing carry on short-funded ALM (Asset-Liability Management) books
Rates were the week's biggest mover, and the move was in the belly. The 5y govt bond repriced 69bp lower to 9.68%, dropping below the 10y at 10.24% after holding 10.37% for months — a sharp flattening of the 5s10s that reverses the post-budget steepening. The front end corroborated: 14-day call money eased 42bp to 9.50% and 7-day to 9.67%, unwinding midweek's post-Eid firming, while T-bill cut-offs held — 91d 9.17%, 364d 9.57%. The complex is pricing easier funding into the weekend, not tighter. The caveat: the 5y is a single fresh print with the curve's other points unchanged, so treat the 69bp as provisional until the next FY27 auction confirms it. If it holds, the belly re-rates duration books and compresses carry on short-funded positions; if it fades, the 5s10s re-steepens. ALCO: mark the gain, but don't chase the belly ahead of the auction.
Macro & Inflation
On the Mar prints, 12m-avg CPI 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 its lowest since Mar 2023 (8.4% then), yet 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 9.17% 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 IMF's 3.5% FY27 growth call
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
Remittance
Remittance held $2.82bn all week; the $1.77bn gap keeps cover positive.
Remittance Inflow
WATCH
- ◆The next monthly print — whether $2.82bn is a dip or the new base
- ◆June–July seasonal pattern — pre-Eid inflows now past
- ◆Jan–May RMG export slide feeding the gap the remittance covers
RISK
- ▼Remittance stuck at $2.82bn if the post-Eid softness extends
- ▼Brent's push to $85 re-widening the trade gap the remittance now just covers
- ▼Apparel export weakness eroding the surplus behind cover
Commodities
Gold firmed to $4,067 on the week; LNG stale at $15 as Brent runs.
WATCH
- ◆Gold as a global risk-sentiment proxy — the persistent bid toward $4,067
- ◆LNG spot for monsoon-demand pricing off the stale 20 Apr tape
- ◆Whether the safe-haven bid extends into EM and frontier flows
RISK
- ▼Gold's safe-haven bid pressuring EM flows and the pinned BDT
- ▼LNG spiking on monsoon power demand, lifting Petrobangla off-take costs
- ▼Brent above $85 lifting the energy-import bill as the trade gap just narrowed
Fiscal
NBR run-rate holds Tk3.61tn; the IMF cut FY27 growth to 3.5% absent reforms.
NBR Tax Revenue
Monthly NBR collection holds Tk3.61tn YTD — lifted off the Tk3.27tn plateau as year-end receipts landed, flat every print since.
The Tk3.61tn level has held all window since stepping off the Tk3.27tn plateau — no new monthly print.
Treasury/ALCO: with the int'l-bond plan and the IMF's 3.5% FY27 call, the funding side stays the risk, not the revenue line.
WATCH
- ◆Terms and timing on the int'l-bond exploration — coupon and tenor against the $34.55bn buffer
- ◆Whether the Invest Bangladesh consolidation shifts the FY27 FDI base
- ◆How NBR bridges the FY27 revenue gap behind the offshore financing
RISK
- ▼The IMF's 3.5% FY27 growth call eroding the revenue base under a 45%-higher target
- ▼External-debt service rising as FY27 financing tilts offshore — the buffer stays rented
- ▼Bank-borrowing over its revised FY26 ceiling at Tk1.25tn on the 5 Jun print
Iran War & Oil
Brent crept to $85.59, WTI cleared $80 as the US expanded strikes north.
Brent Crude
Brent crept to $85.59 (WTI $80.35, now clear of $80) — up ~$0.15 on the week, a third leg above the $80 line.
A third consecutive leg above the $80 zone underwriting FY27's pre-war oil math — up from ~$84 early week.
Treasury: the import-bill cushion stays gone as the mid holds 122.85 — reprovision energy credit lines and watch the northern-Iran escalation.
WATCH
- ◆Whether Brent holds above $85 or a US-Iran accord caps the round-trip
- ◆Oil pass-through into June CPI atop the 15% VAT
- ◆Import-bill drag against the narrower $1.77bn trade gap and the pinned 122.85 mid
RISK
- ▼The northern-Iran escalation widening the Hormuz-route and supply tail
- ▼Brent above $85 re-arming the subsidy and import-bill tail
- ▼FY27 projections under-provisioning if oil holds above $85
Every morning.
Free.