Headlines
The runway narrows as exports face a 15% test and gas capacity slips.
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
- ◆The next FY27 bill auction — whether the 182d holds 9.79% at six months
- ◆Whether the 7-day defends 9.50% or the month-end squeeze recurs at the next turn
- ◆The next reserves print to supersede the 1 May $34.55bn read
RISK
- ▼A reserve buffer dated 1 May quoted against a fuel bill and an LNG import-terminal outage
- ▼Cost-push inflation the 10% policy rate cannot reach, on the central bank's own admission
- ▼The inverted bill curve raising the cost of the FY27 borrowing programme
Banking
On the Q1 print NPLs held 32.26%, CAR 1.56% — capital gone.
WATCH
- ◆Whether Q2 2026 statements land retail delinquency on BSEC's quarterly clock
- ◆Any Q2 2026 CAR disclosure superseding the Sep 2025 read of 1.56%
- ◆Bank scrip against the 5,804 DSE floor tested today
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
No fresh capital print landed, so the tape did the talking. DSEX slid 1.14% to 5,804.30 — the exact 9 Jul reopen floor — on a bank-heavy float, and a Southeast Bank sponsor filed to sell 10 lakh shares into that thin bid. On the Q1 print the averages remain unforgiving: NPLs 32.26%, CAR 1.56% dated September, 844bp below the 10% floor — not a thin cushion but an absent one. The engine that would rebuild it is stalled; private credit growth reads 6.03% on the February print, a 60-period low, starving retained earnings on a book classifying faster than it lends. Retail defaults doubling opens a second front the moment Q2 disclosure forces it onto BSEC's quarterly clock. The dispersion stays the trade: own the private compounders, avoid the SCB tail, re-underwrite the retail book everyone assumed was the safe half.
FX & External
USD/BDT held 122.85 an eighth session as exports face a 15% test.
External Flow Balance
Trade gap held $1.77bn — exports $4.03bn against $2.82bn remittance — leaving $1.05bn of monthly cover as Brent eased to $96.78.
Import cover 5.86mo on the March read — lowest since Feb 2026 (5.3 then) — barrel now $96.78.
Treasury: hedge energy lines while the barrel is off $100 — the $1.05bn cushion is one fuel-heavy import month from turning negative.
WATCH
- ◆Whether Brent holds off $100 — it eased to $96.78 — or the Gulf premium rebuilds
- ◆The next trade print — how much of the $1.05bn cushion a fuel-heavy import month takes
- ◆US 10% tariff pass-through into the RMG line the FY27 target needs to grow 15%
RISK
- ▼Import cover 5.86mo on the March read — lowest since Feb 2026 (5.3 then) — with the regas terminal down
- ▼A $63.4bn export target requiring 15% growth off a base flagged unlikely to rebound
- ▼Offshore dollar funding not taking off, leaving the reserve build reliant on borrowing
The external math got a harder ask today. Against a peg pinned at 122.85 for an eighth session, the government set a $63.4bn FY27 export target — 15% growth — on a base its own data flags unlikely to rebound, with a US 10% tariff already on the RMG line. The arithmetic of the cushion is unchanged and tight: remittance $2.82bn clears the $1.77bn trade gap by $1.05bn, but neither jaw is growing across fourteen prints, and import cover sits at 5.86mo on the March read, lowest since Feb 2026 (5.3 then). Brent easing to $96.78 relieves the bill at the margin — then a damaged LNG import terminal, at least a week from repair, threatens to reload it through costly spot cargo into monsoon demand. The adjustment still runs through the cushion, not the rate: hedge energy lines while the barrel is off $100, and treat the export target as ambition, not forecast.
DSE Markets
DSEX fell 1.14% to 5,804.30, testing the 9 Jul reopen floor.
DSEX Index
DSEX fell 1.14% to 5,804.30 — the 9 Jul reopen floor — with 310 decliners to 59 advancers on Tk939cr turnover.
Ten prints since the 9 Jul reopen at 5,804 — a 5,926 high on 20 Jul, now round-tripped to the base.
Equity desk: the floor held on thin turnover, not conviction — watch the next session for a failed-floor break below 5,804.
WATCH
- ◆Whether 5,804 holds the next session or the failed floor opens the next leg down
- ◆Turnover — Tk939cr is too thin to call the floor defended
- ◆Bank scrip against a retail-default surge and a Southeast Bank sponsor sale
RISK
- ▼The bank-heavy float re-rating down as retail defaults hit the Q2 clock
- ▼A US 10% tariff pressuring the export names inside the index
- ▼Breadth 5-to-1 negative — distribution, not a one-name drag
T-Bonds & T-Bills
182d held 9.79% above the 364d; the 10y eased to 10.24%.
BD Govt Yield Ladder
182d held 9.79% and 91d 9.30%; the 10y eased to 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 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 10.24% 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 at 10.24% — whether duration supply cheapens it back toward the 10.34% recent high
- ◆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 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 doubles on top
- ▼REER at 102.78 keeping the taka dear in real terms while exports face a 15% growth test
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 the 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), 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 to $96.78.
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 and a costlier LNG month
- ◆Offshore dollar funding not taking off — leaving remittance and exports the only inflows
RISK
- ▼A single fuel-heavy import 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 a 15% export-growth target denting the receipts that share the account
Commodities
Gold firmed to $4,068 as crude eased; the regas outage lifts LNG risk.
WATCH
- ◆Whether gold's bid extends or fades if the Gulf premium rebuilds
- ◆LNG spot against the 20 Apr $15/MMBtu print — a regas-terminal outage into peak demand
- ◆Food and energy import lines bidding for the same $1.05bn monthly cushion
RISK
- ▼A terminal-driven spot LNG print landing well above $15/MMBtu into the monsoon 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; corporate tax runs half the peer rate.
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 corporate-tax gap — half the peer rate on a base already flat
- ◆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
- ▼A corporate-tax take half the peer rate — the base is thin, not just flat
- ▼A $421b SDG financing gap the domestic revenue base cannot fund
Iran War & Oil
Brent eased to $96.78, off $100 but $16.78 above the $80 FY27 line.
Brent Crude
Brent eased to $96.78 and WTI to $89.31 — last week's break above $100 has fully unwound, the spread now $7.47.
Brent now prints $16.78 above the $80 FY27 line, back below the $100 it touched last week.
Treasury: crude relief is real, but a damaged LNG import terminal shifts the energy risk to spot cargo — the import bill stays $16.78 above budget.
WATCH
- ◆Whether $96.78 holds or the Gulf premium rebuilds on the Houthi–Saudi escalation
- ◆The regas-terminal outage — spot LNG demand into monsoon against a $15/MMBtu print
- ◆The FY27 subsidy provision against a spot price still $16.78 above its $80 assumption
RISK
- ▼The premium rebuilding onto the same $1.05bn monthly cushion
- ▼A terminal-driven spot LNG spike offsetting the relief from crude easing
- ▼Pass-through into a non-food CPI line at 9.09% on the March print
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