Headlines
Bank-resolution powers arrive as deposits slip and credit stays at 33-year lows.
The fresh tape is a supervisory one. BB has armed temporary administrators with sweeping powers over troubled banks — the resolution toolkit arriving not as prevention but into a credit cycle already grinding its floor: NPLs 32.26% on the Q1 print, system capital adequacy 1.56% on the Q3 2025 read, private credit stalled at a 33-year-low 4.98%. The real-economy strain is building underneath — Chattogram's mills seek a 90-day moratorium as the gas crunch idles garment capacity, and deposits are slipping. BB's other moves — Tk5,000 digital loans, a Tk100cr Bangla-QR fund — widen the payment rails, not the credit source. Read together: the regulator is arming for bank failure while the book stays frozen. The desk stays defensive on the state-owned-bank tail — own the private compounders, fade the capital-short.
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 9.48%, pinned to policy; BB arms a bank-resolution toolkit.
FX Reserves
WATCH
- ◆Whether O/N and 14-day call hold ≤9.50% or month-end demand rebuilds a belly premium
- ◆The overdue reserves refresh past the 1 Jun $37.58bn read
- ◆Deposit-rate pass-through as July's bill-curve drop flows into term funding
RISK
- ▼The new resolution powers signalling a specific bank's distress, not just a general toolkit
- ▼The 7-day's 11.95% dislocation spreading if a single lender's funding gap widens
- ▼Rate relief landing into 33-year-low 4.98% private credit — the cut failing to transmit to lending
Banking
Frozen book meets a new resolution regime as deposits slip.
WATCH
- ◆Whether Q2 2026 statements finally clear the court-stayed loan overhang on BSEC's quarterly clock
- ◆Any Q2 CAR disclosure superseding the 1.56% Q3 2025 read
- ◆Whether BB names an administrator to a specific bank under the new powers
RISK
- ▼The new resolution powers signalling a named-bank failure, not a general toolkit
- ▼Gas-driven RMG closures pushing fresh delinquency into the next NPL print
- ▼Private credit dead at a 33-year-low 4.98% — weak sheets cannot out-grow their NPL stock
The banking book opens frozen on last quarter's prints. NPLs hold 32.26% on the Q1 2026 read; system CAR (Capital Adequacy Ratio) is 1.56% on the Q3 2025 read, 844bp below the 10% floor — a cushion gone, not thin. Into that, BB has armed temporary administrators with sweeping powers over troubled banks: the resolution regime is no longer theoretical. The live pressure is real-economy — private credit at a 33-year-low 4.98%, deposits slipping, and Chattogram's mills seeking a 90-day moratorium as the gas crunch idles a fifth of garment capacity. The 30 July cut is real but useless here: cheaper funding cannot repair a sheet with no borrowers. Dispersion stays the trade — own the private compounders that carry a lean quarter, fade the SCB (state-owned commercial bank) scrip that cannot.
FX & External
Taka steady at 123.82; gold's climb quietly re-widens the oil bill.
External Flow Balance
Trade gap held -$1.77bn — exports $4.03bn against $2.82bn July remittance — as USD/BDT steadied at 123.82 and Brent held $82.76.
Reserves last printed $37.58bn on the 30 Jun read — two prints overdue; the peg has held 123.82 through late July.
Treasury: gold's spike and Brent above $80 reverse the import-bill relief — guard the buffer into the overdue reserve print.
WATCH
- ◆Whether 123.82 holds or the taka resumes its crawl as foreign financing thins
- ◆The overdue reserves refresh past the 30 Jun $37.58bn read
- ◆Whether Brent holds above the $80 FY27 line or the Hormuz bid fades
RISK
- ▼Gold's surge to $4,403 and Brent at $82.76 re-widening the import bill remittance must clear
- ▼The gas crunch idling a fifth of garment capacity thinning the export receipts that fund the peg
- ▼Reserves two prints overdue past the 30 Jun $37.58bn read as foreign financing thins
DSE Markets
DSEX pinned ~5,894 on 6 Aug; weak breadth beneath a flat tape.
DSEX Index
DSEX held ~5,894 on 6 Aug, capped below 5,900; breadth negative 170/176 on Tk1,111cr turnover.
Ten sessions to 6 Aug bracketed by a 5,784 low and a 5,900 high — the cap has not broken across the window.
Equity desk: a flat index masking negative breadth — stay selective 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 confirms fading conviction
- ◆Bank scrip as BB's resolution powers reprice sector risk
RISK
- ▼The 5,900 cap holding as breadth stays negative into the reopen
- ▼The gas-driven garment break repricing RMG and industrial earnings
- ▼A thin-conviction tape fading on light turnover
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 9.54%, 182d 9.53%, 91d 9.30% — while the 10y sits at 10.25%.
The 364d ran 10.09% for six prints after its July jump, then cut ~55bp to 9.535% and held six 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 10.25% — whether FY27 duration supply cheapens it off the level
- ◆5s10s at 57bp — the slope repricing long-dated fixed-rate books
RISK
- ▼The front collapse signalling weak credit demand — 33-year-low 4.98% private growth — not just liquidity
- ▼Deposit and lending rates lagging the bill-curve drop, squeezing bank margins
- ▼Long-end supply into a thin FY27 auction calendar steepening 5s10s from 57bp
Macro & Inflation
Private credit stuck at a 33-year-low 4.98%; June non-food CPI firm at 9.61%.
CPI Trend
June 12m-avg CPI edged up to 8.68%, with point-to-point non-food 9.61% and food 8.6% — disinflation stalled.
The 12m-avg is highest since Dec 2025 (8.8% then) — a June read; 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 — 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 overdue 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 0.34% on the June read leaving a razor-thin carry cushion post-cut
The demand side of the credit cycle is where the story sits, and it is not improving. Private credit growth holds 4.98% — a 33-year low — even as M2 grew 10.52% on the Feb read, its highest since Apr 2022 (10.9% then): the liquidity is in the system, the borrowers are not. The 30 July cut lowers the price of money into a book with no takers, while June point-to-point inflation gives the MPC no cover — non-food firm at 9.61%, food 8.6%, and the August LPG hike not yet in the base. The real policy rate sits at 0.34% on the June read, a razor-thin carry after the cut; import cover holds 6.48mo on the June read, adequate but overdue. Read together: a liquidity-rich, demand-poor economy where easing meets a wall of absent credit appetite — the trade is duration and quality, not a reflation bet.
Remittance
July remittance held $2.82bn; still under the $3bn line.
Remittance Inflow
WATCH
- ◆Whether $2.82bn marks a floor or the top of a slide
- ◆The $1.05bn trade cover as gold and Brent above $80 re-widen the import bill
- ◆Deposit-side strain feeding through as the domestic funding base slips
RISK
- ▼A thinning remittance pipeline if migration outflows slow
- ▼The $1.05bn cushion narrowing as the import bill re-widens on gold and Brent
- ▼Gold's spike and Brent above $80 re-widening the trade gap this inflow must clear
Fiscal
NBR frozen at Tk3.61tn; the 364d at 9.54% funds the FY27 gap.
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 all window
- ◆Govt bank borrowing past the Tk0.94tn Jun 2026 read as FY27 issuance builds
- ◆Whether the 364d stays near 9.54% into the FY27 issuance calendar
RISK
- ▼A thin revenue base carrying the FY27 gap as collection stays flat
- ▼Gas-driven factory closures denting VAT and income receipts into the next NBR print
- ▼The bill-curve relief reversing if issuance supply outruns demand
Iran War & Oil
Brent holds $82.76, above the $80 FY27 line; premium lingers.
Brent Crude
Brent holds $82.76, WTI $77.44 — the Brent-WTI spread near $5.32 — Brent steady above its $80 FY27 line.
Brent sits $2.76 above the $80 FY27 budget line — the war premium has lingered rather than faded.
Treasury: the import bill stays above the FY27 assumption — watch the subsidy line and energy-importer credit into the gas crunch.
WATCH
- ◆Whether Brent holds above $80 or the Hormuz bid fades back under the FY27 line
- ◆The FY27 subsidy provision now that spot Brent sits 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 toward $90 and re-widening the import bill
- ▼A domestic gas shortfall forcing costlier spot LNG as factories idle
- ▼The August LPG hike compounding the firm 9.61% June non-food CPI line
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