Headlines
Bank Resolution Act clears cabinet; oil jumps to $87 as NBFIs delist.
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)
Front stays easy at 9.39%; the 14-day eases to 9.88%, still 38bp over policy.
FX Reserves
WATCH
- ◆Whether the 14-day's 9.88% keeps easing or term tightness rebuilds into month-end
- ◆The overdue June reserve print — the FX buffer behind the front unverified
- ◆Deposit-rate pass-through as July's bill-curve drop flows into term funding
RISK
- ▼Rate relief landing into a 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 overdue since the June print — the buffer behind the corridor unverified
Banking
Book frozen on Q1's 32.26% NPL; cabinet clears the Bank Resolution Act.
WATCH
- ◆Whether the three-NBFI suspension is the tail or the first names in a wider cull
- ◆Q2 2026 statements finally landing the court-stayed loan overhang on BSEC's quarterly clock
- ◆Whether the Bank Resolution Act accelerates SCB (state-owned commercial bank) recapitalisation or forbearance
RISK
- ▼Private credit dead at a 33-year-low 4.98% — weak sheets cannot out-grow their NPL stock
- ▼NBFI liquidation crystallising losses that ripple back into bank exposures
- ▼Court-stayed loan stock understating the printed 32.26% NPL ratio
The banking story keeps its shape but gains a spine. The book is frozen on last quarter's prints — NPLs 32.26% on the Q1 2026 read, system CAR 1.56% on the Q3 2025 read, 844bp below the 10% floor, a cushion gone, not thin. What moved today is the machinery around it: cabinet cleared the Bank Resolution (Amendment) Act, and the exchanges suspended three non-viable NBFIs from trading — the resolution drive now carries statute and its first delisted casualties. The non-bank tail is where distress crystallises first, and its failure feeds back into bank exposures. Cheaper funding cannot revive a book with no borrowers — private credit sits at a 33-year-low 4.98%. Dispersion stays the trade: own the private compounders that survive a lean quarter, fade the SCB paper the new regime tests first.
FX & External
Taka steady at 123.76; gold prints $4,441 as the oil shock returns.
External Flow Balance
USD/BDT held 123.76 and gold printed $4,441 as the July trade gap stayed -$1.77bn — exports $4.03bn against $2.82bn remittance.
USD/BDT broke its 122.85 hold to ~123.80 in late July; reserves $37.58bn on the 30 Jun print.
Treasury: the $6.6bn BoP surplus rests on capital inflows, not earned dollars — watch the reserve refresh as Brent re-widens the import bill.
WATCH
- ◆Whether 123.76 holds or the taka resumes its crawl as Brent re-widens the import bill
- ◆The overdue reserves refresh past the 30 Jun $37.58bn print
- ◆Gold at $4,441 — whether the safe-haven bid signals wider risk-off
RISK
- ▼Brent at $87.24 and freight spikes re-widening the import bill remittance must clear
- ▼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
DSE Markets
DSEX up 0.39% to 5,844; breadth flips green but turnover thins to Tk908cr.
DSEX Index
DSEX rose 0.39% to 5,844.87 off yesterday's 5,822 low; breadth flipped to 199 up, 129 down, but turnover thinned to Tk908cr.
Eleven sessions bracketed by a 5,822 low and 5,900 high; today bounces off the range floor on light volume.
Equity desk: a breadth bounce unconfirmed by volume — stay defensive until turnover reclaims Tk1,000cr and advancers hold.
WATCH
- ◆Whether turnover reclaims Tk1,000cr to confirm the breadth turn or the bounce fades
- ◆The 5,900 band top — whether the bounce extends or stalls mid-range
- ◆Bank and NBFI scrip as the exchanges suspend three non-viable non-bank lenders
RISK
- ▼A breadth bounce on thinning Tk908cr turnover masking distribution, not accumulation
- ▼NBFI delistings and the resolution drive repricing financial-sector float
- ▼Brent's jump to $87.24 repricing gas-crunch industrial earnings
The tape bounced, but it did not convince. DSEX added 0.39% to 5,844.87, lifting off yesterday's 5,822 low, and the internals that cracked a session earlier snapped back — 199 advancers against 129, a decisive reversal of the 79/286 breadth collapse. The problem is the volume behind it: turnover thinned again to Tk908cr, a second session under the Tk1,000cr line that has marked conviction all month. A breadth turn on falling volume is the signature of a relief bounce, not accumulation — the index is range-bound between roughly 5,822 and 5,900, and today's move sits squarely inside it. The backdrop offers no clean catalyst: the exchanges suspended three non-viable NBFIs, the resolution regime gained statute, and private credit sits at a 33-year-low 4.98%. The desk stays defensive on the index — wait for turnover to reclaim Tk1,000cr and confirm the breadth before trusting the bounce.
T-Bonds & T-Bills
Front cuts again — 364d to 9.33%, now below the 9.50% policy.
BD Govt Yield Ladder
The front cut a further ~20bp — 364d 9.33%, 182d 9.32%, 91d 9.19% — all now below the 9.50% policy; the 10y holds 10.24%.
The 364d ran 10.09% for six prints, cut to 9.535% for seven, and now steps down again to 9.33%.
ALCO: price term funding to the falling auction, not the July spike — lock relief before deposit rates catch down.
WATCH
- ◆Whether the next auction extends the cut or the front stabilises below policy
- ◆The 10y at 10.24% — whether FY27 duration supply cheapens the long end
- ◆5s10s near 56bp — the slope repricing long-dated fixed-rate books
RISK
- ▼The front's falling 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 56bp
Macro & Inflation
Private credit 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 further.
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 revives borrowing or the slide extends
- ◆Brent at $87.24 feeding energy cost-push into the next inflation print
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 remittance held $2.82bn; a second month under $3bn as departures thin.
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 $87.24 re-widening the import bill this inflow must clear
Fiscal
NBR frozen at Tk3.61tn; BPC seeks a Tk18,699cr lifeline as oil re-firms.
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 while a Tk18,699cr BPC claim and Brent at $87.24 widen the FY27 gap.
WATCH
- ◆The next monthly NBR print — the Tk3.61tn line has not moved all window
- ◆BPC's Tk18,699cr lifeline — whether it lands as bank borrowing or budget subsidy
- ◆Whether Brent above $85 forces a wider FY27 fuel-subsidy provision
RISK
- ▼A thin revenue base carrying the FY27 gap as receipts stall at Tk3.61tn
- ▼Brent at $87.24 reopening the fuel-subsidy gap the FY27 budget assumed at $80
- ▼Gas-driven factory disruption denting VAT and income receipts into the next NBR print
Iran War & Oil
Brent jumps 4.4% to $87.24, now $7.24 above the $80 FY27 line.
Brent Crude
Brent jumped $3.69 to $87.24, WTI to $81.72 — the spread near $5.52 — crude re-firming hard above $85.
Brent now $7.24 above the $80 FY27 line, versus sub-$80 a fortnight ago — the relief has reversed.
Treasury: the import bill re-widens above the FY27 assumption — watch the subsidy line, BPC's Tk18,699cr call, and energy-importer credit.
WATCH
- ◆Whether Brent holds above $85 or the Hormuz bid fades back toward the $80 FY27 line
- ◆The FY27 subsidy provision now that spot Brent sits $7.24 above its $80 assumption
- ◆BPC's Tk18,699cr lifeline — how the fuel-import bill is financed
RISK
- ▼A renewed Gulf escalation snapping Brent toward the $90 seen a fortnight ago
- ▼Crude plus freight spikes stacking onto the surging import bill and current-account deficit
- ▼The August cooking-gas hike feeding energy cost-push into the Jun 9.61% non-food line
Oil is the day's clean shock. Brent snapped $3.69 higher to $87.24 and WTI to $81.72 — not a drift but a step, and it puts crude $7.24 above the $80 line the FY27 budget was drawn on. The transmission to Bangladesh is direct and stacked: ICCB names the country among the most exposed to the war fallout, the import bill that already dragged the current account to a $1.6bn deficit re-widens, and BPC — profitable a year ago — now seeks a Tk18,699cr lifeline as its fuel-purchase costs outrun cash flow. Each channel lands on a different desk: treasury on the import bill and the peg, credit on energy-importer receivables, fiscal on the subsidy line. The relief of sub-$80 crude a fortnight ago has fully reversed. The book treats $85 as the line in the sand — above it, the FY27 subsidy math and the external account deteriorate together, and gold at $4,441 says the safe-haven bid already sees it.
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