Headlines
Retail defaults double; the credit crack widens beyond the state banks.
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 holds 9.50% under the 10% policy; reserves dated 1 May.
FX Reserves
WATCH
- ◆Whether the 7-day defends 9.50% or the month-end squeeze recurs at the next turn
- ◆The next FY27 bill auction — whether the 182d holds 9.79% at six months
- ◆The next MPS after the chief economist's line that tight policy cannot break cost-push inflation
RISK
- ▼A reserve buffer dated 1 May quoted against an oil bill that touched $100 last week
- ▼Cash outside banks the corridor cannot price
- ▼Cost-push inflation the policy rate cannot reach, on the central bank's own admission
Banking
On the Q1 print NPLs held 32.26%; retail defaults now surging.
WATCH
- ◆Whether retail delinquency lands in 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
- ▼Retail defaults doubling onto a sector already 844bp below the CAR floor
- ▼Private credit at 6.03%, a 60-period low, capping the earnings that rebuild capital
- ▼The state-bank tail carrying the corporate gap while retail cracks on top
The banking line has a new fracture. The averages held — NPLs 32.26% on the Q1 print, CAR 1.56% dated September, 844bp below the 10% floor — but the news is where the next losses come from: retail. Classified accounts doubling as consumer defaults surge moves stress off the state-bank corporate book, where it was at least named and known, onto the household ledger private lenders built their growth on. Against a CAR this thin there is no equity to absorb a second wave; 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 book classifying faster than it lends. The dispersion is still the trade: own the private compounders, avoid the SCB tail, and re-underwrite the retail book everyone assumed was the safe half.
FX & External
USD/BDT held 122.85 a seventh session as exports sag, Brent off $100.
External Flow Balance
Trade gap held $1.77bn — exports $4.03bn against $2.82bn remittance — leaving $1.05bn of monthly cover as Brent eased off $100 to $98.38.
Import cover 5.86mo on the March read — lowest since Feb 2026 (5.3 then) — barrel now $98.38.
Treasury: hedge energy lines while the barrel is off $100 — the $1.05bn cushion is one fuel-heavy month from turning negative.
WATCH
- ◆Whether Brent holds off $100 or the Gulf premium rebuilds — the FY27 cushion is priced off $80
- ◆The next trade print — how much of the $1.05bn cushion a fuel-heavy month takes
- ◆US 10% tariff pass-through into the RMG line the export data already shows sagging
RISK
- ▼Import cover 5.86mo on the March read — lowest since Feb 2026 (5.3 then) — with the fuel bill still elevated
- ▼Exports flagged unlikely to rebound and remittance flat — neither side of the cushion growing
- ▼Offshore dollar funding not taking off, leaving the reserve build reliant on borrowing
DSE Markets
No session today; DSEX last printed 5,871.06 Thursday inside its band.
DSEX Index
DSEX last printed 5,871.06 Thursday, off the 20 Jul high of 5,926 — ten sessions 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 or keeps distributing
- ◆The 5,804 floor from the 9 Jul reopen — the level a failed bounce tests
- ◆Bank scrip against a retail-default surge on top of the Q1 provision gap
RISK
- ▼Bank-heavy float re-rating down as retail defaults surge onto the Q2 disclosure clock
- ▼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 edged to 10.25%.
BD Govt Yield Ladder
182d held 9.79% and 91d 9.30%; the 10y firmed to 10.25% with 5s10s at 57bp — the belly at 9.68% below the six-month bill.
The 182d cleared ~9.40% at seven straight auctions before jumping to 9.79%; the 364d held 9.57% across the window.
ALCO: six-month still yields above twelve-month — fund short; the 10y at 10.25% 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 at 10.25% — whether duration supply cheapens it back toward the 10.34% recent high
- ◆5s10s at 57bp — 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 credit held 6.03%; the money exists, borrowers don't.
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 — a rate cut cannot reach cost-push inflation.
WATCH
- ◆The next CPI print — the first to carry the recent oil spike 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 — lowest since Feb 2026 (5.3 then)
RISK
- ▼Real policy rate at 1.29% — lowest since Feb 2026 (0.9% then) — little room before it turns negative
- ▼Private credit at 6.03%, a 60-period low, as retail delinquency now doubles on top
- ▼REER at 102.78 keeping the taka dear in real terms while exports sag
The macro machine explains why the credit crack matters. Private credit growth reads 6.03% on the February print, a 60-period low, while M2 runs 10.52% — the funding is there, the creditworthy borrower is not, and today's retail-default surge shows why the gap widens rather than closes. Disinflation has stalled, not resumed: the 12m-avg CPI holds 8.6% on the March print, lowest since Mar 2023 (8.4% then), with non-food sticky at 9.09%, so the real policy rate sits at just 1.29% — lowest since Feb 2026 (0.9% then) — with little room before it turns negative. That is the box: rates cannot ease into sticky non-food inflation, but a high rate on a shrinking, souring book compounds the classification it is meant to cure. Expect the next MPS to hold; position for a credit cycle that worsens before the rate can move.
Remittance
Remittance held $2.82bn; cover stays $1.05bn as Brent eases off $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 ~$98
- ◆Offshore dollar funding not taking off — leaving remittance and exports the only inflows
RISK
- ▼A single fuel-heavy month turning the $1.05bn cover negative even with Brent off $100
- ▼Fourteen flat prints — the line is not growing while the bill it funds moves
- ▼The US 10% tariff and sluggish RMG denting the export receipts that share the account
Commodities
Gold firmed to $4,056 as crude eased off $100; the bids stayed split.
WATCH
- ◆Whether gold's bid extends or fades if the Gulf premium rebuilds
- ◆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 monthly cushion
RISK
- ▼An LNG print landing well above $15/MMBtu into the monsoon import month
- ▼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; Tk4,000cr of tobacco VAT leaks out.
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 10.25% 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 Tk4,000cr tobacco-VAT leak — whether enforcement recovers any of it
- ◆The FY27 domestic borrowing programme against an inverted curve at 9.79% for six months
RISK
- ▼Revenue frozen at Tk3.61tn while FY27 spending commitments step up
- ▼Tk4,000cr leaking from a single VAT chain — the base is porous, not just flat
- ▼An inverted curve — the 182d at 9.79% — raising the domestic borrowing cost
Iran War & Oil
Brent eased to $98.38, off $100 but $18.38 above the $80 FY27 line.
Brent Crude
Brent eased to $98.38 and WTI to $90.47 — last week's break above $100 has not held, the spread now $7.91.
Brent now prints $18.38 above the $80 FY27 line, back below the $100 it touched last week.
Treasury: hedge energy lines while the barrel is off $100 — the import bill still prices $18.38 above the $80 budget.
WATCH
- ◆Whether $98.38 holds or the Gulf premium rebuilds on the Houthi–Saudi escalation
- ◆Energy-import LC volumes at the six-month funding point, still 9.79%
- ◆The FY27 subsidy provision against a spot price still $18.38 above its $80 assumption
RISK
- ▼The premium rebuilding onto the same $1.05bn monthly cushion
- ▼Pass-through into a non-food CPI line at 9.09% on the March print
- ▼Houthi strikes and harder Iran action reversing this week's pullback
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