Headlines
Migrant departures at a five-year low; the inflow's source is cooling.
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%; the 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 July's 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 landing into a 33-year-low 4.98% credit demand — 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%; the credit engine is now demand-starved.
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
- ◆RMG-linked exposure as over 20% of garment factories declare a three-day break on the gas crunch
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; system CAR (Capital Adequacy Ratio) sits at 1.56% on the Q3 2025 figure — 844bp below the 10% floor, a cushion gone, not thin. The live signal is demand: private-sector credit growth prints 4.98%, a 33-year low, so even solvent lenders face a shrinking book. Now layer the supply shock — over a fifth of garment factories have declared a three-day break as the gas crunch idles capacity — onto RMG-linked exposure, and the next delinquency wave is a real-economy 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
Peg steady at 123.82; sub-$80 crude eases the reserve drain as jobs cool.
External Flow Balance
Trade gap held $1.77bn — exports $4.03bn, remittance $2.82bn — while USD/BDT steadied at 123.82 and Brent slid under $80 to $79.45.
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 holds on sub-$80 crude, not exports — watch the reserve print as overseas jobs and RMG both cool.
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
- ◆Overseas jobs at a five-year low — the leading indicator for the remittance leg that funds the peg
RISK
- ▼Overseas job departures at a five-year low thinning the forward remittance that funds the peg
- ▼Record $4.49bn external debt repayment bidding for the same FX the $1.77bn trade gap consumes
- ▼Over a fifth of garment factories idled on the gas crunch denting the next export print
The peg's funding math holds today, but its inputs are quietly deteriorating. USD/BDT sits at 123.82, settled softer off the 122.85 break, and reserves $37.58bn on the 30 Jun read keep import cover near 6.48mo — comfortable, if aging. The near-term relief is crude: Brent's slide under $80 to $79.45, down from $90 a fortnight ago, lightens the import bill just as the offsetting inflows soften. And both are cooling at once — July exports slipped 0.9% YoY as over a fifth of garment factories idle on the gas crunch, and overseas job departures, the leading indicator for remittance, just hit a five-year low. The $2.82bn July inflow still clears the $1.77bn trade gap, but the margin has stopped growing. Treasury: the 123.82 peg is funded on softer crude and a remittance base whose pipeline is turning down — hold the constructive stance, but guard the buffer.
DSE Markets
DSEX up 0.14% to 5,894 but turnover fades; bourses shut 6 Aug.
DSEX Index
DSEX edged up 0.14% to 5,894.13 on the 5 Aug close, back at the 5,900 cap; breadth negative 170/176 on Tk1,111cr turnover.
Eleven prints bracketed by a 5,784 low and a 5,900 high; today sits ~6 points under the cap.
Equity desk: a thin-conviction bid, not a breakout — own the broad tape selectively until 5,900 breaks on volume.
WATCH
- ◆Whether the post-holiday reopen finally clears 5,900 or the cap holds again
- ◆Turnover follow-through — a slip under 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 garment-break 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 on negative breadth into the post-holiday reopen
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 three 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
- ◆Import cover 6.48mo on the June read — whether the next reserve print holds it
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
Remittance
July remittance $2.82bn, +15.8% YoY — but the migration pipeline is cooling.
Remittance Inflow
WATCH
- ◆Whether $2.86bn is a floor or the top of a slide after a second month under $3bn
- ◆Overseas jobs at a five-year low — how fast the departure slowdown feeds into monthly inflow
- ◆BB's new PayPal, Payoneer-style rails — a structural add to the inflow channel
RISK
- ▼Overseas job departures at a five-year low signalling a thinner remittance pipeline in coming quarters
- ▼The line's cushion bidding against a record $4.49bn external repayment
- ▼Migration-driven inflows exposed to a slowing Gulf construction cycle
Remittance is the load-bearing leg of the external account — and today the strain shows at its source, not its level. July held $2.82bn — flash $2.86bn, +15.8% YoY — a second month under $3bn. The new signal is the pipeline behind it: overseas job departures just hit a five-year low as Gulf demand cools, and migration is the leading indicator for the inflow two-to-three quarters out. The other leg is stalling too — July exports slipped 0.9% YoY as over a fifth of garment factories idle on the gas crunch — leaving remittance to clear the $1.77bn trade gap almost alone, on a $1.05bn margin that has stopped growing. The offset is crude: Brent's slide under $80 to $79.45 trims the import bill and eases the same FX drain the inflow funds; reserves $37.58bn on the 30 Jun read hold cover near 6.48mo. The runway is funded today — but on softer crude and a base whose forward supply is turning down.
Fiscal
NBR still Tk3.61tn; tax-return filing just hit a multi-year low.
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 July's spike.
WATCH
- ◆The next monthly NBR print — the Tk3.61tn line has not moved across the window
- ◆FY26 tax-return filing at a multi-year low — whether the receipt base keeps eroding
- ◆Whether the 364d stays near 9.54% into the FY27 issuance calendar
RISK
- ▼A thin revenue base carrying the FY27 gap as tax-return filing hits a multi-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 ~$4 to $79.45 — now below the $80 FY27 line, not above.
Brent Crude
Brent fell to $79.45 from $83.70 while WTI eased to $75.17 — the Brent-WTI spread near $4.28.
Brent now prints $0.55 under the $80 FY27 line, down from a $10 premium a fortnight ago.
Treasury: the import bill drops below the FY27 assumption — watch the subsidy line and energy-importer credit into the gas crunch.
WATCH
- ◆Whether Brent holds under $80 or the Gulf premium rebuilds on renewed escalation
- ◆The FY27 subsidy provision now that spot Brent has slipped below 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 factories idle
- ▼The August LPG hike compounding the firm 9.61% June non-food CPI line
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