Headlines
Bank-merger resolution advances; foreign lending down 11%, gas crisis 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 14-day jumped to 10.37%, back above policy; reserves still 1 May.
FX Reserves
WATCH
- ◆Whether the 14-day tightness spreads to the 7-day past the 30 Jul turn
- ◆The next reserves print to supersede the 1 May $34.55bn read
- ◆The next FY27 bill auction — the front cleared 40-52bp dearer last week
RISK
- ▼Month-end funding tightness lifting term rates into early August
- ▼Reserves dated 1 May against a fuel bill the regas outage keeps bidding up
- ▼The bill curve's 40-52bp repricing lifting the FY27 borrowing cost
Banking
Bank-resolution steps advance; on the Q1 print NPLs hold 32.26%, CAR 1.56%.
WATCH
- ◆Whether Q2 2026 statements land the stayed-loan overhang on BSEC's quarterly clock
- ◆Any Q2 CAR disclosure superseding the Sep 2025 read of 1.56%
- ◆Deposit behaviour at the merging banks under the Tk10 lakh withdrawal cap
RISK
- ▼Foreign banks' 11% lending pullback in 2025 thinning cross-border credit
- ▼The court-stayed loan stock understating the printed 32.26% NPL ratio
- ▼S&P's negative outlook lifting sovereign and bank funding costs offshore
The resolution machinery is finally turning: administrators are being withdrawn as new MDs take charge at the rehabilitated banks, and a Tk10 lakh withdrawal cap on merging-bank deposits is the confidence bridge that lets the mergers proceed without a run. It is process, not repair. On the Q1 print NPLs hold 32.26% and CAR reads 1.56% on the September figure — 844bp below the 10% floor, a cushion absent rather than thin — and the true impaired stock sits above the printed ratio once the court-stayed loans are counted, which is exactly what BB's new lawsuit-withdrawal condition on borrower incentives is trying to unfreeze. Meanwhile foreign banks cut lending 11% in 2025, withdrawing the cross-border credit the weakest balance sheets can least replace. The dispersion stays the trade — own the private compounders, avoid the SCB tail.
FX & External
USD/BDT held 122.85 an eleventh session; cover +$1.05bn as Brent eases to $87.41.
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 $87.41.
Peg unmoved an eleventh session since the 122.85 fix; crude now $87.41, off the $100 it touched last week.
Treasury: hedge energy lines while crude is off $90 — a spot-LNG month is one fuel-heavy import from turning the $1.05bn cover negative.
WATCH
- ◆Whether Brent holds below $90 — it eased to $87.41 — or the Gulf premium rebuilds
- ◆US-Bangla's $1.5bn Boeing lease commitment landing on the FX payments side
- ◆How much of the $1.05bn cushion the next trade print gives up to a spot-LNG month
RISK
- ▼S&P's negative outlook lifting the cost of the offshore borrowing the reserve build depends on
- ▼A spot-LNG month turning the $1.05bn cushion negative even with crude off $90
- ▼A $1.5bn aircraft-lease commitment adding to the FX payments queue
DSE Markets
DSEX +1.04% to 5,900.27 — round-trip complete, and Tk1,261cr confirms it.
DSEX Index
DSEX rose 1.04% to 5,900.27, a second gain retaking the 5,900 line, on Tk1,261cr turnover with 284 advancers to 60.
From the 9 Jul reopen floor of 5,804 — a 5,926 high on 20 Jul, broken to 5,784, now retaken on rising volume.
Equity desk: the reclaim now has volume behind it — a confirmed recovery, not relief; watch whether 5,900 holds as support or caps again.
WATCH
- ◆Whether 5,900 now holds as support or caps the rally as it did on 23 Jul
- ◆Turnover — Tk1,261cr confirms the move; whether it builds or fades from here
- ◆Bank scrip against S&P's negative outlook and pending Q2 disclosure
RISK
- ▼A two-day rally mistaken for a trend — the credit overhang is unchanged
- ▼S&P's negative outlook repricing the bank-heavy float on the next catalyst
- ▼NPLs 32.26%, CAR 1.56% — the fundamentals the bounce has not touched
What broke and reclaimed now has confirmation. DSEX closed 5,900.27, up 1.04% and a second straight gain, completing the round-trip from a 5,926 high on 20 Jul down through the 5,784 break and back to the 5,900 line it last held ten sessions ago. The difference today is the tape underneath it: turnover of Tk1,261cr, up from Tk872cr on the reclaim and Tk781cr on the break, breadth 284 advancers to 60 — the volume expansion a genuine recovery needs and the earlier bounce lacked. That earns the move more than a relief label. But the index is bank-heavy, and the credit cycle it sits on is untouched by two green sessions: NPLs 32.26%, CAR 1.56%, S&P now negative on that same banking stress. Volume validates the trade, not the balance sheets. Ride the tape in the private compounders that led it; keep fading the SCB scrip.
T-Bonds & T-Bills
The repriced bill curve holds — 364d 10.09%, dis-inverted; the 10y steady at 10.24%.
BD Govt Yield Ladder
The repriced bill curve holds — 364d 10.09%, 182d 9.99%, 91d 9.79% — the front inversion cleared and steady at the new level.
The 364d held 9.57% through twelve prints before its 52bp jump to 10.09% two auctions ago — steady since.
ALCO: the front sits 40-52bp dearer than a month ago and dis-inverted — term funding costs more; extend duration selectively while the 10y lags.
WATCH
- ◆Whether the next auction extends past the 10.09% 364d or the front stabilises here
- ◆The 10y at 10.24% — whether duration supply cheapens it toward the 10.34% recent high
- ◆5s10s at 56bp — the slope that reprices any long-dated fixed-rate book
RISK
- ▼Duration marks if the 10y cheapens toward 10.34% to match the bill repricing
- ▼The FY27 borrowing programme clearing 40-52bp dearer than a month ago
- ▼Higher front funding costs unwinding carry across the book
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 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
- ◆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 public capex contracts alongside
- ▼REER at 102.78 keeping the taka dear while exports face a 15% growth test
Remittance
Remittance held $2.82bn; cover stays $1.05bn as Brent eases to $87.41.
Remittance Inflow
WATCH
- ◆The next monthly print — whether $2.82bn is a floor or the top of a slide
- ◆BB's new PayPal, Payoneer-style rails — a structural add to the inflow channel
- ◆How much of the $1.05bn cushion the next trade print gives up to a spot-LNG month
RISK
- ▼A single spot-LNG-heavy import month turning the $1.05bn cover negative even with Brent off $90
- ▼The line flat across the window — not growing while the bill it funds moves
- ▼A 15% FY27 export-growth target denting the receipts that share the account
Commodities
Gold eased to $4,018.70 as crude fell; the regas outage lifts LNG risk.
WATCH
- ◆LNG spot against the 20 Apr $15/MMBtu print — a regas outage now hitting the export base
- ◆Whether gold's bid extends or fades if the Gulf premium rebuilds
- ◆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 across the window; bank borrow Tk0.94tn on 30 Jun.
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, all Tk3.61tn — the last new monthly figure predates the window; S&P now cites the fiscal risk.
Treasury: with revenue frozen and S&P negative, FY27 funding costs rise 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 Panda-bond feasibility panel — foreign-currency sovereign funding under study
- ◆US-Bangla's $1.5bn aircraft lease — a large private FX commitment beside the sovereign's
RISK
- ▼S&P's negative outlook lifting the cost of the FY27 domestic and offshore borrowing programme
- ▼A corporate-tax take half the peer rate — the base is thin, not just flat
- ▼Development spending contracting alongside private credit at a 60-period low
Iran War & Oil
Brent eased to $87.41, off $100 but $7.41 above the $80 FY27 line.
Brent Crude
Brent eased to $87.41 and WTI to $82.58 — last week's break above $100 has fully unwound, the spread now $4.83.
Brent now prints $7.41 above the $80 FY27 line, back below the $100 it touched last week.
Treasury: crude relief is real, but the regas outage shifts energy risk to spot cargo — the import bill stays $7.41 above budget.
WATCH
- ◆Whether $87 holds or the Gulf premium rebuilds on renewed escalation
- ◆The regas outage — spot LNG into monsoon, now pulling textile millers to the PM
- ◆The FY27 subsidy provision against a spot price still $7.41 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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