Headlines
Inflation eases to 8.32% in July; reserves draw and Brent nears $90.
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 below policy at 9.37%; the 14-day snaps to 11.50%.
FX Reserves
WATCH
- ◆Whether the 14-day's 11.50% is a month-end spike or term tightness rebuilding
- ◆The overdue July reserve print — the FX buffer behind the front unverified since $36.42bn
- ◆Deposit-rate pass-through as the bill-curve drop flows into term funding
RISK
- ▼Term funding tightening above the SLF ceiling while the front eases — a fractured corridor
- ▼Rate relief landing into a 33-year-low 4.98% private credit — the cut failing to transmit
- ▼A razor-thin 0.82% real policy rate on the Jun read leaving little carry cushion post-cut
Banking
Book frozen on Q1's 32.26% NPL; CAR 844bp below the floor.
WATCH
- ◆Q2 2026 NPL disclosure finally landing the court-stayed loan overhang
- ◆Whether the Bank Resolution Act accelerates SCB (state-owned commercial bank) recapitalisation or forbearance
- ◆Private credit at 4.98% — whether the 30 July cut revives borrowing
RISK
- ▼Private credit 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
- ▼SCB recap risk crystallising under the new resolution regime
The banking book is frozen on last quarter's prints, and the freeze is the story. NPLs sit at 32.26% on the Q1 2026 read, system CAR at 1.56% on the Q3 2025 read — 844bp below the 10% floor, a cushion gone, not thin. Neither has moved, and neither will until Q2 disclosure lands the court-stayed loan overhang that already understates the printed ratio. The backdrop hardened over the past week — the Bank Resolution (Amendment) Act now in statute, three non-viable NBFIs delisted — but the transmission problem is unchanged: cheaper funding cannot revive a book with no borrowers, and private credit sits at a 33-year-low 4.98%. The money is there; demand is not. 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 123.64; reserves ease to $36.42bn as Brent nears $90.
External Flow Balance
USD/BDT held 123.64; July flows — exports $4.03bn, remittance $2.82bn, trade gap -$1.77bn — while reserves drew to $36.42bn.
Reserves eased from $37.58bn (30 Jun) to $36.42bn on the 31 Jul print — import cover 6.28mo.
Treasury: earned dollars soft as reserves draw and Brent nears $90 — the FX buffer is doing the work; watch the peg at 123.64.
WATCH
- ◆Whether 123.64 holds or the taka resumes its crawl as Brent re-widens the bill
- ◆The reserve trajectory past the $36.42bn 31 Jul print after the June draw
- ◆Gold at $4,424 — whether the safe-haven bid signals wider risk-off
RISK
- ▼Brent at $88.93 and freight re-widening the import bill remittance must clear
- ▼A $6.6bn BoP surplus funded by capital inflows while the current account runs $1.6bn negative
- ▼Reserves drawing down while earned dollars stay soft
DSE Markets
DSEX clears 5,900, up 1.00%; turnover reclaims Tk1,000cr at Tk1,115cr.
DSEX Index
DSEX rose 1.00% to 5,903.53, breaking the 5,900 range top; turnover reclaimed Tk1,000cr at Tk1,115cr, breadth 242 up to 101 down.
Eleven sessions bracketed 5,822–5,903; today clears the top after two sub-Tk1,000cr sessions.
Equity desk: the breadth bounce is finally volume-confirmed — the range top gives way; watch a hold above 5,900.
WATCH
- ◆Whether 5,900 holds as support or the breakout fails back into the range
- ◆Turnover sustaining above Tk1,000cr to confirm accumulation, not a one-day spike
- ◆Bank and NBFI scrip as the resolution regime reprices financial float
RISK
- ▼A failed breakout back below 5,900 turning the move into a bull trap
- ▼Brent at $88.93 repricing gas-crunch industrial earnings
- ▼Thin follow-through if turnover slips back under Tk1,000cr
T-Bonds & T-Bills
Bill front steady below policy; the 5y cheapens to 9.79%, 5s10s to 46bp.
BD Govt Yield Ladder
The front held below policy — 91d 9.19%, 182d 9.32%, 364d 9.33% — while the 5y backed up to 9.79%, the 10y at 10.25%.
The 364d stepped 10.09% to 9.535% to 9.33% over the window; the 5y held 9.68% until today's back-up.
ALCO: 5s10s compresses to ~46bp as the belly cheapens — price term funding to the stable front, watch belly supply.
WATCH
- ◆Whether the next auction resumes the front's cut or holds below policy
- ◆The 5y at 9.79% — whether belly supply cheapens duration further
- ◆5s10s near 46bp — the slope repricing long-dated fixed-rate books
RISK
- ▼The belly back-up on FY27 supply steepening term funding costs
- ▼The falling front signalling weak credit demand, not just easy liquidity
- ▼Deposit and lending rates lagging the bill-curve, squeezing bank margins
Macro & Inflation
Private credit at a 33-year-low 4.98%; July CPI eases to 8.32%.
CPI Trend
The CPI 12m-avg firmed to 8.68% on the Jun print — food p2p 10.7%, non-food 9.61% — the trailing average still climbing.
Highest since Dec 2025 (8.8% then) — a trailing read that lags July's headline easing to 8.32%.
MPC: the monthly turn shows — July printed 8.32%, an 8-month low — but the trailing average hasn't; hold before easing.
WATCH
- ◆The next 12m-avg print — whether July's 8.32% headline pulls the trailing average down
- ◆Private credit at 4.98% — whether the 30 July cut revives borrowing
- ◆Brent at $88.93 feeding energy cost-push into the next CPI print
RISK
- ▼Private credit at a 33-year-low 4.98% with M2 10.52% on the Feb read — liquidity present, demand absent
- ▼A razor-thin 0.82% real policy rate on the Jun read after the 30 July cut
- ▼The August cooking-gas hike and Brent at $88.93 compounding cost-push into the next print
Two forces pull the macro read in opposite directions, and the tabular figures only capture one. On prices, disinflation has resumed: July headline CPI eased to 8.32%, an 8-month low, even though the trailing 12m-avg still reads 8.68% on the Jun print — highest since Dec 2025 (8.8% then) — because the average lags the monthly turn. On credit, the machine is stalled: private credit sits at a 33-year-low 4.98% while M2 grew 10.52% on the Feb read — liquidity is abundant, borrowers absent. That combination — cooling prices, dead credit demand, a razor-thin 0.82% real policy rate on the Jun read after the 30 July cut — is the case for a hold, not another cut. Cheaper money has not moved the credit needle; more of it risks the August cooking-gas hike and Brent at $88.93 relighting cost-push before the July turn is confirmed.
Remittance
July held $2.82bn, a second month under $3bn as reserves draw.
Remittance Inflow
WATCH
- ◆Whether $2.82bn is a floor or the top of a slide after a second month under $3bn
- ◆The reserve trajectory past the $36.42bn 31 Jul print as the June build reverses
- ◆Brent near $90 re-widening the import bill the inflow must clear
RISK
- ▼Earned dollars softening while reserves draw and the current account runs $1.6bn negative
- ▼Capital inflows, not remittance, carrying the $6.6bn BoP surplus
- ▼Brent at $88.93 stacking onto the import bill this inflow must clear
Remittance is the hero today for what it is not doing. July inflows held $2.82bn — a second consecutive month under $3bn, and though the +15.8% YoY line still reads healthy, the sequential picture is a plateau, not a climb. That matters because the buffer around it is drawing down: reserves eased from $37.58bn on the 30 Jun print to $36.42bn by the 31 Jul read, and import cover slipped to 6.28mo. Brent's push to $88.93 — $8.93 above the $80 FY27 line — re-widens the import bill the same inflow must clear, and the current account already runs $1.6bn negative. The $6.6bn BoP surplus rests on capital inflows, not earned dollars — a financing mix that can reverse. The book stays defensive on the taka: the 123.64 peg holds today, but the runway behind it is measured in months, and July shortened it.
Fiscal
NBR frozen at Tk3.61tn; Brent near $90 reopens the FY27 fuel-subsidy 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 while BPC's Tk18,699cr claim and Brent at $88.93 widen the FY27 gap.
WATCH
- ◆The next monthly NBR print — the Tk3.61tn line has not moved all window
- ◆Whether Brent near $90 forces a wider FY27 fuel-subsidy provision
- ◆BPC's Tk18,699cr lifeline — whether it lands as bank borrowing or budget subsidy
RISK
- ▼A thin revenue base carrying the FY27 gap as receipts stall at Tk3.61tn
- ▼Brent at $88.93 reopening the fuel-subsidy gap the FY27 budget set at $80
- ▼Govt bank borrowing crowding private credit already at a 33-year-low 4.98%
Iran War & Oil
Brent extends to $88.93, WTI $83.27 — now $8.93 above the $80 FY27 line.
Brent Crude
Brent climbed to $88.93, WTI $83.27 — the spread near $5.66 — crude pushing toward $90, extending the war premium.
Brent now $8.93 above the $80 FY27 line, up from $87.24 a session ago and sub-$80 a fortnight back.
Treasury: each dollar of Brent widens the import bill and the BPC subsidy claim — watch $90 and energy-importer receivables.
WATCH
- ◆Whether Brent breaks $90 or the Hormuz bid fades toward the $80 FY27 line
- ◆The FY27 fuel-subsidy provision with spot $8.93 over the $80 assumption
- ◆BPC's Tk18,699cr lifeline — how the fuel-import bill is financed
RISK
- ▼A Gulf escalation carrying Brent through $90 onto the import bill and the peg
- ▼Crude plus freight stacking onto the $1.6bn current-account deficit
- ▼The August cooking-gas hike compounding energy cost-push into the next CPI print
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