Headlines
Brent's breakout led the week; investment and LDC graduation framed the policy noise.
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)
The 7-day call money crossed to 10.14%, back above the policy rate.
FX Reserves
WATCH
- ◆Whether the 7-day holds above 10% into month-end or slides back below policy as it did mid-week
- ◆The next FY27 bill auction — whether the 182d defends 9.79% at six months
- ◆Cash hoarding, reported up 34% — currency outside banks the corridor cannot price
RISK
- ▼A liquidity squeeze if the 7-day above policy signals funding stress, not just month-end demand
- ▼A reserve buffer dated 1 May quoted against Brent now $95.49 — the cover is older than the shock
- ▼Deposit flight re-tightening the system on the reported 34% jump in hoarded cash
Banking
NPLs held 32.26% and CAR 1.56% all week; Jamuna's +22% the outlier.
WATCH
- ◆Whether the Tk9,367cr provision gap lands in the Q2 2026 statements on BSEC's quarterly clock
- ◆More strong-name H1 results after Jamuna's +22% — or whether the beat is idiosyncratic
- ◆Any Q2 2026 CAR disclosure superseding the Sep 2025 read of 1.56%
RISK
- ▼Tk9,367cr of unbooked provisions landing as a capital charge on a sector 844bp below the floor
- ▼Private credit growth at 6.03%, a 60-period low, capping the earnings that rebuild capital
- ▼Deposit flight — the reported 34% rise in hoarded cash — shrinking the low-cost funding base
The banking line was the week's great non-event: NPLs 32.26% on the Q1 print, CAR 1.56% dated September, 844bp below the floor, not a basis point moved in five sessions. The signal is in the dispersion, not the average. Jamuna Bank's H1 profit up 22% to Tk378cr is the reminder that 'the sector' is a fiction — a cohort of private lenders compounds through the cycle while the state-bank tail carries the Tk9,367cr provision gap. That gap is a loss already incurred and not yet booked; against a CAR this thin there is no cushion, so the charge lands on equity the moment Q2 disclosure forces it onto BSEC's quarterly clock. Private credit growth at 6.03% — a 60-period low — starves the one internal engine that rebuilds capital: retained earnings on a growing book. Into next week: own the compounders, avoid the tail, treat index-level 'bank' exposure as a barbell, not an average.
FX & External
USD/BDT held 122.85 all week as Brent broke out to $95.49.
External Flow Balance
Trade gap held $1.77bn all week — exports $4.03bn against $2.82bn remittance — leaving $1.05bn of monthly cover as Brent broke to $95.49.
Import cover 5.86mo on the Mar read — lowest since Feb 2026 (5.3 then) — barrel now $95.49.
Treasury: with Brent at $95.49, hedge energy lines now — the mid-week give-back was a pause, not a trend.
WATCH
- ◆Whether Brent's breakout to $95.49 holds or fades — the cushion is priced off $80
- ◆The next trade print — how much of the $1.05bn cushion the fuel bill takes at $95
- ◆The FSRU gas outage — whether it forces spot LNG onto the same external account
RISK
- ▼Import cover 5.86mo on the Mar read — lowest since Feb 2026 (5.3 then) — with Brent now $95.49
- ▼Exports flat at $4.03bn and remittance flat — neither side of the cushion is growing
- ▼Reserves held at $34.55bn by borrowing, dated 1 May against a shock priced today
DSE Markets
DSEX round-tripped the week to 5,871; Friday's breadth turned 2:1 negative.
DSEX Index
DSEX round-tripped to 5,871.06, −0.47% Friday, on turnover Tk1,211cr — but breadth flipped to 245 declining against 100 advancing.
Ten prints since the 9 Jul reopen at 5,804 — a 5,926 high on 20 Jul, now back to 5,871.
Equity desk: turnover up but breadth negative — distribution; watch 5,804 as the floor the failed bounce now tests.
WATCH
- ◆Whether turnover above Tk1,200cr resolves up or keeps distributing as it did Friday
- ◆The 5,804 floor from the 9 Jul reopen — the level the failed bounce now tests
- ◆Bank scrip against the Tk9,367cr provision gap on a quarterly disclosure clock
RISK
- ▼A bank-heavy float re-rating down as Q2 2026 statements date the Tk9,367cr provision gap
- ▼The insurance margin row that dragged the tape spreading to the broader index
- ▼Private credit at 6.03%, a 60-period low, capping earnings for the lenders that dominate the float
The week set a test and the tape failed it. Thursday delivered the condition the desk had asked for — turnover back through Tk1,070cr at Tk1,129cr, breadth 294 to 58 — and for one session the bounce had money behind it. Friday took it back: turnover rose again to Tk1,211cr, but breadth flipped to 245 declining against 100 advancing and the index gave up 0.47% to 5,871, off Monday's 5,926 high. Higher volume on a down day with breadth that negative is distribution, not accumulation — the sellers used the bid to exit. What they were selling is the problem: bank scrip dominates the float, and it sits on a Tk9,367cr provision gap and a 32.26% NPL ratio while private credit growth at 6.03% — a 60-period low — caps any re-rating. Trade the broad tape only while breadth confirms; stay underweight the lenders; treat a close below 5,804 as the signal the bounce is done.
T-Bonds & T-Bills
182d held 9.79% above the 364d; the 10y richened back to 10.24%.
BD Govt Yield Ladder
182d held 9.79% and 91d 9.30% all week; the 10y ended 10.24% after a Thursday spike to 10.34%, with 5s10s at 56bp.
The 182d cleared ~9.40% at seven straight auctions before this 9.79%; the 364d held 9.57% for nine prints.
ALCO: six-month still yields above twelve-month — fund short; the 10y's failure to hold 10.34% delays adding duration.
WATCH
- ◆The next FY27 auction — whether it defends 9.79% at six months or the inversion unwinds
- ◆The 10y between 10.24% and 10.34% — the range that signals whether duration supply is landing
- ◆5s10s at 56bp — the steepening that reprices any long-dated fixed-rate book
RISK
- ▼Duration marks if the 10y cheapening from 10.24% resumes toward 10.34%
- ▼Negative carry on the front book — 182d at 9.79% against a 364d asset at 9.57%
- ▼FY27 gross supply repeating the six-month clear at each subsequent auction
Macro & Inflation
On the Mar prints CPI held 8.6%; credit stuck at 6.03% all week.
CPI Trend
CPI 12m-avg held 8.6% on the Mar print — food 8.24%, non-food 9.09% — disinflation has flattened rather than resumed.
The 12m-avg is lowest since Mar 2023 (8.4% then), with food lowest since Dec 2025 (7.7% then).
MPC: with the real policy rate at 1.29% and credit at 6.03%, the next MPS holds — a cost shock, no demand.
WATCH
- ◆The next CPI print — the first to carry Brent above $95 into a non-food line already at 9.09%
- ◆Private credit at 6.03% — whether the next print breaks the 60-period low or confirms it
- ◆Import cover 5.86mo on the Mar read against a fuel bill $15.49 above the FY27 line
RISK
- ▼Cash hoarding, reported up 34%, draining the deposit base M2 growth of 10.52% represents
- ▼Real policy rate at 1.29% — lowest since Feb 2026 (0.9% then) — little room before it turns negative
- ▼REER at 102.78 keeping the taka dear in real terms while exports hold flat at $4.03bn
Remittance
Remittance held $2.82bn all week; cover stays $1.05bn as oil climbs.
Remittance Inflow
WATCH
- ◆The next monthly print — whether $2.82bn is a floor or the top of a slide
- ◆How much of the $1.05bn cushion the next trade print gives up to fuel at $95.49
- ◆The PRI digital-payments proposal — whether it routes more of the flow through formal channels
RISK
- ▼A single fuel-heavy month turning the $1.05bn cover negative as Brent breaks out
- ▼Thirteen-plus flat prints — the line is not growing while the bill it funds is
- ▼Cash hoarding, reported up 34% — confidence in the formal channel routes this line through banks
Commodities
Gold surged to $4,126.40 this week as crude broke out; LNG stale at $15.
WATCH
- ◆Whether gold holds above $4,120 or fades on a genuine de-escalation
- ◆LNG spot against the 20 Apr $15/MMBtu print — three months stale into peak demand
- ◆Food and energy import lines bidding for the same $1.05bn cushion as crude breaks out
RISK
- ▼An LNG print landing well above $15/MMBtu into the same import month as $95.49 Brent and a gas outage
- ▼Food and energy import lines bidding for the same $1.05bn monthly cushion
- ▼Pass-through into a non-food CPI line at 9.09% on the Mar print
Fiscal
NBR stuck at Tk3.61tn all week while spending commitments step up.
NBR Tax Revenue
Monthly NBR collection printed flat all week, holding the YTD line at Tk3.61tn — no new receipt landed across the window.
Fourteen prints in the window, all at Tk3.61tn — the last new monthly figure predates the window entirely.
Treasury: with the 10y at 10.24–10.34% and Ecnec adding Tk14,041cr, FY27 funding cost rises against a frozen revenue line.
WATCH
- ◆The next monthly NBR print — the Tk3.61tn line has not moved across the window
- ◆Whether the Tk14,041cr of new Ecnec approvals lands on the FY27 domestic borrowing programme
- ◆The 3-year LDC extension — how it reshapes the post-graduation tariff timeline
RISK
- ▼Revenue frozen at Tk3.61tn while FY27 spending commitments step up
- ▼A steepening curve — the 10y at 10.24–10.34% — raising the domestic borrowing cost
- ▼Post-LDC targets underwritten by investment that is not arriving
Iran War & Oil
Brent ran $15.49 above the $80 FY27 line to a fresh high of $95.49.
Brent Crude
Brent broke out to $95.49 and WTI to $87.89 — a decisive new run-high, up from the low-$90s mid-week, spread now $7.60.
Brent now prints well above the $90.96 peak that capped the run earlier this week.
Treasury: hedge energy lines here — the import bill prices $15.49 above the $80 budget and the pause is over.
WATCH
- ◆Whether $95.49 holds the breakout or the premium fades as it briefly did mid-week
- ◆Energy-import LC volumes at the six-month funding point, still 9.79%
- ◆The FY27 subsidy provision against a spot price now $15.49 above its $80 assumption
RISK
- ▼The premium rebuilding onto the same $1.05bn monthly cushion
- ▼The FSRU gas outage forcing costlier spot LNG onto the import bill alongside crude
- ▼Pass-through into a non-food CPI line at 9.09% on the Mar print
Oil was the week's decisive mover. Brent climbed through a mid-week give-back — the $1.85 dip that read as a decaying premium — and broke out Friday to $95.49, a clean new run-high with WTI at $87.89. The barrel now prints $15.49 above the $80 line FY27's subsidy and import math was written against; the softer session that looked like an opening to relax cover instead marked the low. The domestic side compounds it: an FSRU fault took gas offline nationwide, and the fix — a third unit pledged within a month — routes through costlier spot LNG on the same import account, still marked at a stale $15/MMBtu. Two energy lines now bid for the $1.05bn monthly cushion at once, against a reserve buffer dated 1 May. Into next week the desk buys energy cover here, prices the subsidy line off $95, not $80, and watches non-food CPI for the pass-through.
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