Headlines
Loan demand at a three-decade floor — cheap money, no borrowers.
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)
Call money steady at 9.48% — July's belly premium stays gone.
FX Reserves
WATCH
- ◆Whether O/N and 14-day call hold at/below 9.50% or month-end demand rebuilds the belly premium
- ◆The next reserves print refreshing the 1 Jun $37.58bn read
- ◆Deposit-rate pass-through as the July yields-dive flows into term funding
RISK
- ▼The 7-day's 11.95% dislocation spreading if a single lender's funding gap widens
- ▼Rate relief arriving into dead credit demand — private growth a 33-year low at 4.98% — so the cut fails to transmit to lending
- ▼A real policy rate of 0.82% on the June read leaving a thin carry cushion after the 30 July cut
Banking
Q1 NPL frozen at 32.26%; private credit now a 33-year low.
WATCH
- ◆Whether Q2 2026 statements finally land the court-stayed loan overhang on BSEC's quarterly clock
- ◆Any Q2 CAR disclosure superseding the 1.56% Q3 2025 read
- ◆BB lifting lending caps on five Sonali Bank branches — a targeted state-bank credit loosening
RISK
- ▼The credit impulse dead at a 33-year-low 4.98% — the weakest sheets cannot out-grow their NPL stock
- ▼Gas-driven factory closures pushing fresh RMG-sector delinquency into the next NPL print
- ▼The court-stayed loan stock understating the printed 32.26% NPL ratio
The banking book is frozen on last quarter's prints while the new pressure arrives through the real economy. NPLs hold 32.26% on the Q1 2026 read and system CAR sits at 1.56% on the Q3 2025 figure — 844bp below the 10% floor, a cushion absent, not thin. The live signal is demand, not capital: private-sector credit growth has printed 4.98%, now labelled a 33-year low, so even the banks that could lend face a shrinking book to grow into. Layer the energy shock — gas-driven factory closures and a 0.9% YoY July export dip — onto RMG-linked exposure, and the next delinquency wave is a supply story, not a policy one. Rate relief is real, call money back at 9.48%, but useless here: cheaper funding cannot repair a sheet with no borrowers. Dispersion stays the trade — own the private compounders that can carry a lean quarter, fade the state-owned commercial bank (SCB) scrip that cannot.
FX & External
Taka holds 123.82; July exports dipped 0.9% YoY as Brent eased.
External Flow Balance
Trade gap held $1.77bn — exports $4.03bn, remittance $2.82bn — while USD/BDT steadied at 123.82 and Brent slid to $83.70.
USD/BDT broke its fourteen-print 122.85 hold to 123.82 in late July; reserves $37.58bn on the 30 Jun read.
Treasury: the peg is settling at 123.82, not sliding — Brent's slide to $83.70 eases the reserve drain into the next print.
WATCH
- ◆Whether 123.82 holds or the taka resumes its crawl as foreign financing thins
- ◆The next reserves print refreshing the 30 Jun $37.58bn read
- ◆Export momentum after a 0.9% YoY July dip against a $63.4bn FY27 target needing 15% growth
RISK
- ▼The 0.9% YoY export dip signalling the RMG engine stalling into the gas-supply crunch
- ▼Record $4.49bn external debt repayment bidding for the same FX the $1.77bn trade gap consumes
- ▼A second month of sub-$3bn remittance thinning the buffer that funds the peg
DSE Markets
DSEX eased to 5,885.69; breadth flipped to 165/169 as turnover slipped.
DSEX Index
DSEX eased to 5,885.69, down 0.17% and back under 5,900; breadth flipped to 165/169 on Tk1,211cr turnover.
Ten sessions bracketed by a 5,784 low and 5,900; today sits 14 points below the high, unable to clear it.
Equity desk: rate relief is not lifting the bank-heavy float — own the broad tape selectively until 5,900 breaks.
WATCH
- ◆Whether 5,900 stays a ceiling into the 6 Aug holiday close and the post-holiday reopen
- ◆Turnover follow-through — a slip toward Tk1,000cr would confirm fading conviction
- ◆Bank scrip as private credit prints a 33-year-low 4.98% and NPLs hold 32.26% on the Q1 read
RISK
- ▼The gas-driven factory-closure tape repricing RMG and industrial float earnings
- ▼Rate relief failing to lift banks while credit growth prints a 33-year low
- ▼A thin-conviction tape fading further as breadth turns negative
T-Bonds & T-Bills
Front holds near policy — 364d 9.54%, July's spike stays unwound.
BD Govt Yield Ladder
The front holds July's unwind — 364d 9.535%, 182d 9.53%, 91d 9.30% — while the 10y sits at 10.24%.
The 364d ran 10.09% for six prints after its July jump, then cut 55bp to 9.535%, held two prints since.
ALCO: price term funding to the auction, not the July spike — lock relief before deposit rates catch down.
WATCH
- ◆Whether the next auction holds the front near 9.50% or cuts further below policy
- ◆The 10y at 10.24% — whether FY27 duration supply cheapens it toward the 10.34% recent high
- ◆5s10s at 56bp — the slope repricing long-dated fixed-rate books
RISK
- ▼The front collapse signalling weak credit demand — a 33-year-low 4.98% private growth — not just liquidity
- ▼Deposit and lending rates lagging the bill-curve drop, squeezing bank NIMs
- ▼Long-end supply into a thin FY27 auction calendar steepening 5s10s from 56bp
Macro & Inflation
Private credit at a 33-year-low 4.98%; June non-food CPI firm at 9.61%.
CPI Trend
June point-to-point inflation is firm — non-food 9.61%, food 8.6% — while the 12m-avg holds 8.6% on the older March print.
The 12m-avg is lowest since Mar 2023 (8.4% then) — a March read; the June point-to-point is firming again.
MPC: with June non-food 9.61% and the August LPG hike not yet in the base, hold before easing.
WATCH
- ◆The next CPI print — the first to carry the August LPG hike into the 9.61% June non-food line
- ◆Private credit at 4.98% — whether the print marks a floor or extends the slide from 6.03%
- ◆Import cover 6.48mo on the June read — the 30 Jun reserve build lifted it from 5.86mo
RISK
- ▼June non-food inflation at 9.61% firming as the August LPG hike compounds the next cost-push print
- ▼Private credit at a 33-year-low 4.98% with M2 10.52% on the Feb read — liquidity present, demand absent
- ▼A real policy rate of 0.82% on the June read leaving a thin carry cushion after the 30 July cut
The number that matters printed a 33-year low. Private-sector credit growth sits at 4.98%, and the diagnosis is demand, not liquidity: M2 grew 10.52% on the Feb read, so the money is there — the borrowers are not. That is the mechanism behind a frozen banking book and a bill curve that fell back to policy in one auction: yields drop when there is nothing to fund. Inflation offers no offset — on the June point-to-point prints non-food is firm at 9.61% and food 8.6%, and the August LPG hike is not yet in the base, so the next print carries fresh cost-push. That leaves a real policy rate of 0.82% on the June read, a thin cushion after the 30 July cut. The external line is the one bright spot: import cover holds 6.48mo on the June read as Brent's slide to $83.70 lightens the bill. For the MPC, hold — easing into a 33-year credit low makes no borrowers, only pressures the taka.
Remittance
July remittance $2.82bn, +15.8% YoY — the steadier leg as exports slip.
Remittance Inflow
WATCH
- ◆Whether $2.86bn is a floor or the top of a slide after a second month below $3bn
- ◆Remittance versus the softening export leg after a 0.9% YoY July export dip
- ◆BB's new PayPal, Payoneer-style rails — a structural add to the inflow channel
RISK
- ▼A second month below $3bn signalling the post-Eid base is softening
- ▼The line's cushion bidding against a record $4.49bn external repayment
- ▼Migration-driven inflows exposed to a slowing Gulf construction cycle
Remittance has quietly become the load-bearing leg of the external account. July printed $2.82bn on the held base — a flash $2.86bn, +15.8% YoY — a second consecutive month under $3bn, so the post-Eid softening is real. What makes it matter is the other leg: July exports slipped 0.9% YoY off a 12-month high as the RMG engine stalls into the gas-supply crunch. That leaves the inflow to clear the $1.77bn trade gap almost alone, with a margin near $1.05bn that has stopped growing. The offset arrives from oil: Brent's slide to $83.70 from $90 trims the import bill and eases the same FX drain remittance funds. Reserves $37.58bn on the 30 Jun read hold import cover near 6.48mo, and the peg sits at 123.82. The runway is funded — but on remittance and softer crude, not on exports. If $2.86bn is the top of a slide rather than a floor, the buffer that holds 123.82 thins fast.
Fiscal
NBR still Tk3.61tn; the FY27 gap funds at a 364d 9.54%.
NBR Tax Revenue
Monthly NBR collection printed flat again, holding the YTD line at Tk3.61tn — no new receipt across the fourteen-print window.
Fourteen prints, all Tk3.61tn — the last new monthly figure predates the window.
Treasury: revenue frozen, but the FY27 gap funds cheaper — onshore clears at a 364d 9.54%, ~55bp below the July spike.
WATCH
- ◆The next monthly NBR print — the Tk3.61tn line has not moved across the window
- ◆Govt bank borrowing beyond the 30 Jun Tk0.94tn as the FY27 programme funds
- ◆Whether the 364d stays near 9.54% into the FY27 issuance calendar
RISK
- ▼A thin revenue base carrying the FY27 gap as foreign commitments hold a 14-year low
- ▼Gas-driven factory closures denting VAT and income receipts into the next NBR print
- ▼The bill-curve relief reversing if issuance supply outruns the demand shortfall
Iran War & Oil
Brent fell ~$6 to $83.70 — now $3.70 over the $80 line, not $10.
Brent Crude
Brent fell to $83.70 from $90.12 while WTI eased to $80.07 — the Brent-WTI spread narrowed to $3.63.
Brent now prints $3.70 above the $80 FY27 line, down from a $10.12 premium last week.
Treasury: the import bill falls toward the FY27 assumption — watch the subsidy line and energy-importer credit into the gas crunch.
WATCH
- ◆Whether Brent holds near $84 or the Gulf premium rebuilds on renewed escalation
- ◆The FY27 subsidy provision against a spot Brent now $3.70 above its $80 assumption
- ◆The August LPG hike feeding energy cost-push into the June 9.61% non-food line
RISK
- ▼A renewed Gulf escalation snapping Brent back above $90 and re-widening the import bill
- ▼A domestic gas-supply shortfall forcing costlier spot LNG onto the energy bill as the fuel crisis bites
- ▼The August LPG hike compounding the firm 9.61% June non-food CPI line
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