Headlines
Fuel imports +85%; BB restricts undercapitalised banks; rice prices firm.
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)
Term funding stressed at two weeks; overnight and 7-day inside the corridor.
FX Reserves
WATCH
- ◆Whether the 14-day normalises back inside the 11.50% SLF ceiling next week or entrenches above it
- ◆Which banks fall under the new capital-based operating restrictions, and whether their call-money bid vanishes or migrates
- ◆The next FY27 T-bill auction against a 91d holding 9.17%
RISK
- ▼A persistent 14-day above the ceiling repricing short-funded ALM (Asset-Liability Management) books
- ▼Operating restrictions on weak banks pushing their funding need onto the SLF window rather than the market
- ▼Reserve build loan-funded — net thinner than the $34.55bn 1 May gross
Banking
On the Q1 print NPLs hold 32.26% atop a 1.56% CAR.
WATCH
- ◆Which banks are named or effectively identified under the new operating restrictions, and their deposit behaviour in the following fortnight
- ◆Whether restricted banks shrink risk-weighted assets to meet CAR rather than recapitalise
- ◆Any Q2 2026 CAR disclosure that supersedes the Sep 2025 read
RISK
- ▼CAR 844bp below the 10% floor — the solvency hole unmoved on the Sep 2025 read
- ▼Operating curbs triggering deposit flight at the restricted names, converting a solvency problem into a liquidity one
- ▼Forbearance across banks and NBFIs still deferring recognition system-wide
Until today the 1.56% CAR was a number in a table. BB attaching operating restrictions to capital inadequacy changes its status: the ratio now determines what a bank is permitted to do, not merely what it must disclose. That is the correct supervisory move and an uncomfortable one, because a sector 844bp below the 10% floor on the Sep 2025 read cannot meet the test by raising capital at speed — it meets it by shrinking. Expect asset disposals, LC lines pulled, and SME renewals declined at exactly the names whose borrowers have nowhere else to go. The second-order risk is funding: a restriction visible to the market is visible to depositors, and the 14-day call at 11.98% — 48bp through the SLF ceiling — suggests the two-week bid is already concentrated somewhere. Watch deposit movement at the restricted names over the next fortnight. The trade is unchanged: only fresh capital re-rates the book, and enforcement without recapitalisation is deleveraging, not repair.
FX & External
USD/BDT holds 122.85; an 85% fuel bill jump eats the flow cushion.
External Flow Balance
Trade gap holds $1.77bn against exports $4.03bn and remittance $2.82bn — cover positive at $1.05bn, but the fuel bill is up 85%.
Remittance has held $2.82bn since the post-Eid step-down from $3.43bn — a third month clearing the gap.
Treasury: the $1.05bn cushion is the entire FX runway — hedge energy-linked exposure before the fuel bill lands in the gap.
WATCH
- ◆Whether BB holds the 122.85 mid through the fuel-bill pass-through, or lets the mid drift as it did through Q1
- ◆The $335m Chinese loan signing date — the tranche that keeps the buffer flat rather than falling
- ◆Next month's remittance print against a $1.05bn cushion the fuel bill is now eating
RISK
- ▼Fuel and rice imports bidding for the same dollars while exports hold flat at $4.03bn
- ▼Import cover last read 5.86mo — lowest since Feb 2026 (5.3 then) — thinning further on an 85% fuel line
- ▼A rented $34.55bn buffer meeting a hard-currency service line that turns net-negative within three years
The exchange rate is the least informative number in this section. USD/BDT has not moved from 122.85, and it will not move until BB decides it should — which is precisely why the pressure shows up elsewhere. Today it shows up in the fuel bill, up 85% on the Middle East conflict with Brent at $88.10, and behind that in rice, where flood damage is reopening an import line that was meant to stay shut. Against that, the earning side is static: exports $4.03bn, remittance $2.82bn, a trade gap of $1.77bn and a $1.05bn monthly cushion that has now acquired a competing claim. The buffer holds at $34.55bn only because it keeps being topped up — the $335m Chinese facility is the next instalment, and it arrives as a liability, not an earning. For the desk this is a runway question, not a rate question. Price FX-linked exposure off the cushion, not off the peg: energy importers need hedges rather than headroom, and export-concentrated names should be shortened, not simply repriced.
DSE Markets
DSEX 5,900 on the reopen; 240 fall against 103 advancing.
DSEX Index
DSEX closed 5,900.36, down 0.44% from Thursday's 5,926.28 — 240 stocks fell against 103 advancing on Tk1,118cr turnover.
Seventh print off the 9 Jul reopen — 5,804 → 5,849 → 5,911 → 5,926 → 5,900, the first down print of the run.
Equity desk: breadth contradicted the high before price did — treat 5,804 as the reopen-run support to defend.
WATCH
- ◆Whether 5,900 holds or the index retraces toward the 9 Jul reopen at 5,804
- ◆Bank scrip reaction to the capital-based operating restrictions in the next two sessions
- ◆Whether eased margin-loan rules lift turnover off Tk1,118cr or merely lift leverage
RISK
- ▼Bank-heavy index exposed to the 32.26% NPL pile and a 1.56% sector CAR now carrying operating curbs
- ▼Negative breadth — 240 down against 103 up — signalling the reopen rally was narrow
- ▼Looser margin rules adding leverage to a market fading on thin depth
T-Bonds & T-Bills
The 10y holds 10.34%; the 5y keeps its 9.68% rally.
BD Govt Yield Ladder
The 10y holds 10.34% and the 5y 9.68% — 5s10s steady at 66bp; T-bills flat (91d 9.17%, 182d 9.40%, 364d 9.57%).
The 5y has held 9.68% since breaking a 10-print run at 10.37% — now its fourth print at the lower level.
ALCO: the bear-steepening has stalled, not reversed — treat the 5y's 9.68% as provisional until the next FY27 auction.
WATCH
- ◆Whether the next FY27 auction clears 91d inside 9.17% or backs the front end up
- ◆The 14-day call at 11.98% — front-end funding stress against a 9.17% bill
- ◆Whether the $335m Chinese facility shifts FY27 issuance offshore and flattens onshore supply
RISK
- ▼A long-end backup extending the 5s10s and marking down duration books
- ▼FY27 gross supply re-steepening the curve if borrowing stays onshore
- ▼The 5y's 9.68% reversing if the next auction re-prices the belly
Macro & Inflation
On the Mar prints 12m-avg CPI held 8.6%; credit binds at 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: with the fuel bill up 85% and rice turning, both baskets argue against any easing tilt at the next MPS.
WATCH
- ◆The next CPI print for the 85% fuel-bill jump feeding non-food already at 9.09%
- ◆Rice prices on flood damage against a food line that printed 8.24% in March
- ◆Private credit at 6.03% against the factory-closure tape
RISK
- ▼Fuel and rice hitting both CPI baskets at once before the 12m-avg clears 8%
- ▼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 holds $2.82bn; the fuel bill now bids for the cushion.
Remittance Inflow
WATCH
- ◆The next monthly print — whether $2.82bn is a dip or the new post-Eid base
- ◆How much of the $1.05bn cushion the 85% fuel line absorbs in the next trade print
- ◆Gulf labour-market flow as the FY27 wage cycle sets
RISK
- ▼Remittance stuck at $2.82bn if the post-Eid softness extends past the summer
- ▼An 85% fuel bill and firming rice imports widening the gap this cushion covers
- ▼Export erosion — EU share ceded — thinning the receipts behind cover
Commodities
Gold slips to $4,013; LNG still stale at the 20 Apr $15 print.
WATCH
- ◆Rice import tenders on flood damage — the second hard-currency food line after fuel
- ◆LNG spot for monsoon-demand pricing off the stale 20 Apr tape
- ◆Whether gold's drift below $4,023 continues as the EM-flow proxy
RISK
- ▼Rice imports on flood damage adding to an already-85% fuel bill
- ▼LNG spiking on monsoon power demand atop an $88 crude bill
- ▼Energy and food import costs feeding a non-food CPI already at 9.09%
Fiscal
NBR YTD holds Tk3.61tn; a $335m Chinese tranche fills the gap.
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 fuel bill up 85%, the subsidy side is the FY27 risk, not the revenue line.
WATCH
- ◆Signing terms and tenor on the $335m Chinese facility against the $34.55bn buffer
- ◆Whether the fuel-subsidy line is revised in-year with Brent at $88.10 versus the $80 budget assumption
- ◆How NBR bridges the FY27 revenue gap sitting behind the offshore tilt
RISK
- ▼A fuel bill up 85% blowing through an FY27 subsidy provision written at $80 Brent
- ▼Bank borrowing over its revised FY26 ceiling at Tk1.25tn on the 5 Jun print
- ▼A closure wave and ceded EU share eroding the revenue base under a higher FY27 target
Iran War & Oil
Brent steady at $88.10; WTI up to $82.49 — fuel imports +85%.
Brent Crude
Brent holds $88.10 and WTI firms to $82.49 — the fuel import bill has now printed 85% higher on the conflict.
Brent sits $8.10 above the $80 line underwriting FY27's pre-war oil math, and above the $84.89 early-July low.
Treasury: the price is now in the payments data — keep energy credit lines provisioned and re-test FY27 subsidy assumptions.
WATCH
- ◆Whether $88.10 holds through the week or the premium fades as it did to $84.89 in early July
- ◆Energy-import LC volumes at the two-week funding point where call money reads 11.98%
- ◆The FY27 subsidy provision, written at $80 Brent against a spot $8.10 higher
RISK
- ▼An 85% fuel bill consuming the $1.05bn cushion remittance provides over the trade gap
- ▼Subsidy and import-bill provisioning built on an $80 FY27 assumption
- ▼Oil pass-through into a non-food CPI line already at 9.09%
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