Headlines
Inflows drive a $6.6bn BoP surplus; PMI rebounds, earned dollars cool.
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)
Overnight eases to 9.40%, but the 14-day jumps back to 9.97%.
FX Reserves
WATCH
- ◆Whether the 14-day's 9.97% is month-end demand or a durable belly tightening
- ◆The overdue reserves refresh past the $37.58bn Jun print
- ◆Deposit-rate pass-through as July's bill-curve drop flows into term funding
RISK
- ▼Rate relief landing into 33-year-low 4.98% private credit — the cut failing to transmit to lending
- ▼A real policy rate of 0.34% on the Jun read leaving a razor-thin carry cushion post-cut
- ▼Reserves stale since the Jun print — the FX buffer behind the front unverified
Banking
Book frozen on Q1's 32.26% NPL; BB moves to wind up four NBFIs.
WATCH
- ◆Whether the four-NBFI liquidation is contained or signals wider non-bank distress
- ◆Q2 2026 statements finally landing the court-stayed loan overhang on BSEC's quarterly clock
- ◆Whether the Sick Industries Law push turns gas-crunch distress into forbearance
RISK
- ▼Private credit dead at a 33-year-low 4.98% — weak sheets cannot out-grow their NPL stock
- ▼Court-stayed loan stock understating the printed 32.26% NPL ratio
- ▼NBFI liquidation crystallising losses that ripple back into bank exposures
The banking story holds its shape: the book is frozen on last quarter's prints while the supervisor keeps moving. NPLs hold 32.26% on the Q1 2026 read; system CAR is 1.56% on the Q3 2025 read — 844bp below the 10% floor, a cushion gone, not thin. Today the resolution drive widened: after arming administrators over troubled banks, BB moved to liquidate four NBFIs — the non-bank tail is where distress crystallises first, and its failure feeds back into bank exposures. The real economy sends a mixed signal — July PMI rebounded to 57.8 and private-sector activity picked up — but cheaper funding cannot revive a book with no borrowers, private credit at a 33-year-low 4.98%. Dispersion stays the trade: own the private compounders that survive a lean quarter, fade the SCB (state-owned commercial bank) paper the new regime tests first.
FX & External
Taka steady at 123.80; inflows carry a $6.6bn BoP surplus, gold re-firms.
External Flow Balance
Trade gap held -$1.77bn — exports $4.03bn against $2.82bn July remittance — as USD/BDT steadied at 123.80 and the current account slid to a $1.6bn deficit.
USD/BDT broke its 122.85 hold to 123.80 in late July; reserves $37.58bn on the 30 Jun print.
Treasury: a $6.6bn BoP surplus built on capital inflows, not earned dollars — watch the reserve print and the financing mix.
WATCH
- ◆Whether 123.80 holds or the taka resumes its crawl as the current-account gap widens
- ◆The overdue reserves refresh past the 30 Jun $37.58bn print
- ◆How durable the capital inflows behind the $6.6bn BoP surplus prove
RISK
- ▼A $6.6bn BoP surplus funded by borrowed dollars while the current account runs $1.6bn negative
- ▼Record external repayment bidding for the same FX the import surge consumes
- ▼Brent at $83.55 and freight spikes re-widening the import bill remittance must clear
The peg's funding math still clears, but its composition is quietly deteriorating. USD/BDT holds 123.80, steady since the late-July break off 122.85; reserves of $37.58bn on the 30 Jun read keep import cover near 6.48mo — adequate, but two prints overdue. The headline reassures: the balance of payments printed a $6.6bn surplus. The detail unsettles: the current account swung to a $1.6bn deficit as import bills surged, so the surplus is built on the financial account — external loans and portfolio inflows, not export or remittance dollars. That is a more fragile foundation than earned FX, and it bids for the same dollars a record external-repayment schedule already claims. July's PMI rebound to 57.8 hints at firmer export prints ahead, but until earned inflows recover, treasury holds the constructive taka stance and guards the buffer into the overdue reserve print.
DSE Markets
DSEX down 0.66% to 5,822; turnover slips under Tk1,000cr, breadth 79/286.
DSEX Index
DSEX slipped 0.66% to 5,822.32, sliding toward the 5,784 floor of its 5,784–5,900 band; breadth cracked to 79 up, 286 down on Tk965cr.
Eleven sessions bracketed by a 5,784 low and 5,900 high; the floor now nears as turnover slips under Tk1,000cr.
Equity desk: a range-bound index masking a breadth-and-turnover collapse — stay defensive until advancers and volume turn together.
WATCH
- ◆Whether the 5,784 band floor holds or the eleven-session range breaks lower
- ◆Turnover under Tk1,000cr — whether conviction returns or the slide extends
- ◆Bank scrip as BB widens resolution to four NBFIs and NPLs hold Q1's 32.26%
RISK
- ▼The 79/286 breadth collapse repricing float ahead of a range break lower
- ▼Sub-Tk1,000cr turnover masking distribution under a still-range-bound index
- ▼Gas-crunch industrial earnings repricing despite factory reopenings
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 10.25%, 5s10s near 57bp.
The 364d ran 10.09% for six prints after its July jump, then cut ~55bp to 9.535%, held six 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 10.25% — whether FY27 duration supply cheapens it off the level
- ◆5s10s near 57bp — the slope repricing long-dated fixed-rate books
RISK
- ▼The front's low cut-off signalling weak credit demand — 4.98% private growth — not just easy liquidity
- ▼Deposit and lending rates lagging the bill-curve drop, squeezing bank margins
- ▼Long-end FY27 supply into a thin auction calendar steepening 5s10s off 57bp
Macro & Inflation
Private credit stuck at a 33-year-low 4.98%; CPI 12m-avg firms to 8.68%.
CPI Trend
The CPI 12m-avg firmed to 8.68% on the Jun print, non-food point-to-point 9.61% and food 8.6% — disinflation has stalled.
The 12m-avg is highest since Dec 2025 (8.8% then) — a Jun read that turns the disinflation trend back up.
MPC: with the 12m-avg turning up and the August cooking-gas hike not yet in the base, hold before easing.
WATCH
- ◆The next CPI print — first to carry the August cooking-gas hike into the Jun 9.61% non-food line
- ◆Private credit at 4.98% — whether the 30 July cut finally revives borrowing or the slide extends
- ◆The 12m-avg firming to 8.68% — whether disinflation has genuinely stalled or reverses
RISK
- ▼The 12m-avg turning up to 8.68% as the August cooking-gas 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 Jun read leaving a razor-thin carry cushion post-cut
Remittance
July held $2.82bn; a BoP surplus now leans on inflows, not earned dollars.
Remittance Inflow
WATCH
- ◆Whether $2.82bn is a floor or the top of a slide after a second month under $3bn
- ◆Overseas departures at a five-year low — how fast the migration slowdown feeds monthly inflow
- ◆The financing mix behind the $6.6bn BoP surplus as earned dollars soften
RISK
- ▼Overseas job departures at a five-year low signalling a thinner pipeline in coming quarters
- ▼A $6.6bn BoP surplus leaning on capital inflows while the current account runs $1.6bn negative
- ▼Brent at $83.55 and freight spikes re-widening the import bill this inflow must clear
Remittance is the hero today for a reason: it is the earned-dollar line, and it is softening under a balance of payments that still looks healthy. July inflows held $2.82bn — flash $2.86bn, +15.8% YoY — a second consecutive month under $3bn, and overseas departures at a five-year low thin the pipeline feeding the next print. The headline reassures: the overall balance printed a $6.6bn surplus. The composition does not — the current account swung to a $1.6bn deficit as imports surged, so the surplus rests on the financial account: external loans and portfolio flows, not earned dollars. Remittance covers the $1.77bn trade gap by just $1.05bn, a cushion that has stopped growing, while borrowed dollars do the visible work. The book stays constructive on the taka but treats the funding mix as the real watch — a runway financed by inflows is thinner than one earned.
Fiscal
NBR frozen at Tk3.61tn; the 364d at 9.54% funds the gap cheaper.
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
- ◆Whether gas-crunch closures and the Sick Industries Law push dent VAT and income receipts
- ◆Whether the 364d stays near 9.54% into the FY27 issuance calendar
RISK
- ▼A thin revenue base carrying the FY27 gap as receipts stall at Tk3.61tn
- ▼Gas-driven factory disruption denting VAT and income receipts into the next NBR print
- ▼Bill-curve relief reversing if FY27 issuance supply outruns the demand shortfall
Iran War & Oil
Brent steady at $83.55, $3.55 above the $80 FY27 line.
Brent Crude
Brent holds $83.55, WTI $78.18 — the spread near $5.37 — crude steady above $80 after last week's whipsaw.
Brent sits $3.55 above the $80 FY27 line, versus sub-$80 last Thursday and a $10 premium a fortnight ago.
Treasury: the import bill stays above the FY27 assumption — watch the subsidy line and energy-importer credit as freight costs spike.
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 $3.55 above its $80 assumption
- ◆The August cooking-gas hike feeding energy cost-push into the Jun 9.61% non-food line
RISK
- ▼A renewed Gulf escalation snapping Brent toward the $90 seen a fortnight ago
- ▼Crude plus freight spikes stacking onto the surging import bill
- ▼A domestic gas-supply relapse forcing costlier spot LNG as factories reopen
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