Headlines
Brent breaks $100 and Washington's tariff lands as the deficit widens.
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 fell to 9.50%, back under the 10% policy rate.
FX Reserves
WATCH
- ◆Whether the 7-day holds below policy or the month-end squeeze recurs at the next turn
- ◆The next FY27 bill auction — whether the 182d defends 9.79% at six months
- ◆The BB economist's line that tight policy won't break inflation — a dovish tell before the next MPS
RISK
- ▼A reserve buffer dated 1 May quoted against Brent now $100.38 — the cover is older than the shock
- ▼Cash hoarding draining currency outside banks the corridor cannot price
- ▼Cost-push inflation the policy rate cannot reach, per the central bank's own admission
Banking
On the Q1 print NPLs held 32.26%; CAR 844bp below the floor.
WATCH
- ◆Whether the Tk9,367cr provision gap lands in the Q2 2026 statements on BSEC's quarterly clock
- ◆Any Q2 2026 CAR disclosure superseding the Sep 2025 read of 1.56%
- ◆Private credit at 6.03% — whether the next print breaks or confirms the 60-period low
RISK
- ▼The Tk9,367cr unbooked provision landing as a capital charge on a sector 844bp below the floor
- ▼Private credit at 6.03%, a 60-period low, capping the earnings that rebuild capital
- ▼Deposit flight — hoarded cash rising — shrinking the low-cost funding base
The banking line did not move: NPLs 32.26% on the Q1 print, CAR 1.56% dated September, 844bp below the 10% floor. The number to hold is not the average but the arithmetic behind it — a Tk9,367cr provision gap that is a loss already incurred and not yet booked. Against a CAR this thin there is no equity to absorb it; the charge lands the moment Q2 disclosure forces it onto BSEC's quarterly clock. The engine that would rebuild the buffer is stalled: private credit growth at 6.03%, a 60-period low, starves retained earnings on a growing book, and the central bank's own concession that tight policy cannot break cost-push inflation means rates stay high on a weak book. The dispersion is the trade — a cohort of private lenders compounds through the cycle while the state-bank tail carries the gap. Own the compounders, avoid the tail, treat index-level bank exposure as a barbell, not an average.
FX & External
USD/BDT held 122.85 as Brent broke $100 and the deficit widened 24%.
External Flow Balance
Trade gap held $1.77bn — exports $4.03bn against $2.82bn remittance — leaving $1.05bn of monthly cover as Brent broke through $100.
Import cover 5.86mo on the March read — lowest since Feb 2026 (5.3 then) — barrel now $100.38.
Treasury: hedge energy lines now — with Brent through $100 the $1.05bn cushion is one fuel-heavy month from turning negative.
WATCH
- ◆Whether Brent holds above $100 or fades — the FY27 cushion is priced off $80
- ◆The next trade print — how much of the $1.05bn cushion the fuel bill takes at $100
- ◆US 10% tariff pass-through into the RMG export line that anchors the trade account
RISK
- ▼Import cover 5.86mo on the March read — lowest since Feb 2026 (5.3 then) — with Brent now $100.38
- ▼Exports falling 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
The peg is doing the work of a statistic that has stopped moving. USD/BDT has held 122.85 for a sixth session while the import bill it defends broke higher — Brent through $100, now $20.38 above the $80 line FY27's math was written against. The rate is stable because the adjustment is running elsewhere: through a $34.55bn reserve carrying 5.86mo of cover on the March read, the lowest since Feb 2026 (5.3 then), and through a $1.05bn monthly margin that has not grown since the post-Eid step-down. That margin is the whole buffer — remittance at $2.82bn over a $1.77bn trade gap — and both jaws are closing. The deficit widened 24% as exports fell; the US 10% tariff now sits on the RMG line that anchors receipts; oil reloads the payment side. The desk hedges energy lines here, prices the fuel bill off $100 not $80, and treats the flat rate as the symptom, not the reassurance.
DSE Markets
No session today; DSEX last printed 5,871.06 Thursday on failing breadth.
DSEX Index
DSEX last printed 5,871.06 Thursday, off the 20 Jul high of 5,926 — ten sessions have round-tripped inside a 122-point band since the reopen.
Ten prints since the 9 Jul reopen at 5,804 — a 5,926 high on 20 Jul, now back to 5,871.
Equity desk: the weekend shut the book unresolved — watch Sunday's turnover and 5,804 as the floor a failed bounce would test.
WATCH
- ◆Sunday's reopen — whether turnover resolves the round-trip up or keeps distributing
- ◆The 5,804 floor from the 9 Jul reopen — the level a failed bounce tests
- ◆Bank scrip against the Tk9,367cr provision gap on a quarterly disclosure clock
RISK
- ▼Bank-heavy float re-rating down as Q2 2026 statements date the Tk9,367cr provision gap
- ▼US 10% tariff pressuring the export names inside the index
- ▼Private credit at 6.03%, a 60-period low, capping earnings for the lenders that dominate the float
T-Bonds & T-Bills
182d held 9.79% above the 364d; the 10y steady at 10.24%.
BD Govt Yield Ladder
182d held 9.79% and 91d 9.30%; the 10y steady at 10.24% with 5s10s at 56bp — the belly at 9.68% below the six-month bill.
The 182d cleared ~9.40% at seven straight auctions before this 9.79%; the 364d has held 9.57% for nine prints.
ALCO: six-month still yields above twelve-month — fund short; the 10y holding 10.24% keeps duration on hold until the next auction clears.
WATCH
- ◆The next FY27 auction — whether the 182d defends 9.79% at six months or the inversion unwinds
- ◆The 10y around 10.24% — whether duration supply lands or cheapens it back toward 10.34%
- ◆5s10s at 56bp — the steepening that reprices any long-dated fixed-rate book
RISK
- ▼Duration marks if the 10y cheapening 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 March prints CPI held 8.6%; credit stuck at 6.03%.
CPI Trend
CPI 12m-avg held 8.6% on the March 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 — but Brent through $100 threatens the non-food line.
WATCH
- ◆The next CPI print — the first to carry Brent above $100 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 March read against a fuel bill $20.38 above the FY27 line
RISK
- ▼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 fall
- ▼The central bank's own concession that tight policy cannot break cost-push inflation
Remittance
Remittance held $2.82bn; cover stays $1.05bn as Brent tops $100.
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 $100
- ◆The PRI digital-payments proposal — whether it routes more flow through formal channels
RISK
- ▼A single fuel-heavy month turning the $1.05bn cover negative as Brent breaks $100
- ▼Fourteen flat prints — the line is not growing while the bill it funds is
- ▼The US 10% tariff denting the RMG receipts that share the same external account
Commodities
Gold fell to $4,052 as crude broke $100; the two bids diverged.
WATCH
- ◆Whether gold's pullback extends or the safe-haven bid returns on re-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 $100
RISK
- ▼An LNG print landing well above $15/MMBtu into the same import month as $100 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 March print
Fiscal
NBR stuck at Tk3.61tn; bank borrowing reads Tk0.94tn on the June print.
NBR Tax Revenue
Monthly NBR collection printed flat again, holding the YTD line at Tk3.61tn — no new receipt has landed across the fourteen-print 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% and revenue frozen, FY27 funding cost rises against a flat receipt line — watch the next NBR print.
WATCH
- ◆The next monthly NBR print — the Tk3.61tn line has not moved across the window
- ◆The FY27 domestic borrowing programme against an inverted curve at 9.79% for six months
- ◆US 10% tariff — the revenue drag if it dents the RMG export base
RISK
- ▼Revenue frozen at Tk3.61tn while FY27 spending commitments step up
- ▼An inverted curve — the 182d at 9.79% — raising the domestic borrowing cost
- ▼Post-LDC targets underwritten by investment that is not arriving
Iran War & Oil
Brent broke $100 to $100.38, now $20.38 above the $80 FY27 line.
Brent Crude
Brent broke $100 to $100.38 and WTI to $92.15 — a decisive extension of last week's $95 run, the spread now $8.23.
Brent now prints $20.38 above the $80 FY27 line and well through the $95.49 high that capped last week.
Treasury: hedge energy lines here — the import bill prices $20.38 above the $80 budget and the $95 pause has broken.
WATCH
- ◆Whether $100 holds as a floor or the premium fades on a genuine de-escalation
- ◆Energy-import LC volumes at the six-month funding point, still 9.79%
- ◆The FY27 subsidy provision against a spot price now $20.38 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 March print
Oil is the shock the external account cannot absorb quietly. Brent broke $100 to $100.38 with WTI at $92.15 — the barrel now $20.38 above the $80 line FY27's subsidy and import math assumed, and last week's $95 print reads in hindsight as a waystation, not a ceiling. The domestic side compounds it: an FSRU fault took gas offline nationwide, and the fix — a third unit pledged within a month — routes through spot LNG still marked at a stale $15/MMBtu, three months old into monsoon demand. Two energy lines now bid for the same $1.05bn monthly cushion, against a reserve buffer dated 1 May. The pass-through is not yet in the data — CPI is a March print — but it is coming onto a non-food line already at 9.09%. The desk buys energy cover here, prices the subsidy and import bill off $100 not $80, and watches the next CPI for the shock the peg is currently hiding.
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