Headlines
A BPC subsidy claim and restored LNG lead a thin, energy-heavy Saturday tape.
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 inside policy; the overdue reserve print is the missing check.
FX Reserves
WATCH
- ◆Whether the 14-day holds inside the SLF ceiling or term tightness returns at month-end
- ◆The overdue July reserve refresh — the FX buffer behind the easy front still unverified
- ◆Deposit-rate pass-through as the bill-curve drop reaches term funding
RISK
- ▼The 30 July cut reaching the curve but not the 4.98% private-credit borrower
- ▼A weak reserve print repricing the peg behind the easy corridor
- ▼A razor-thin 0.34% real policy rate on the Jun read leaving no carry cushion post-cut
Banking
The book holds frozen — NPL 32.26% on Q1, CAR 844bp under the floor.
WATCH
- ◆Q2 2026 NPL disclosure finally landing the court-stayed loan overhang
- ◆Whether the Bank Resolution Act accelerates SCB recapitalisation or forbearance
- ◆Private credit at 4.98% — whether the 30 July cut revives borrowing
RISK
- ▼Court-stayed loan stock understating the printed 32.26% NPL ratio
- ▼Private credit at a 33-year-low 4.98% — weak sheets cannot out-grow their NPL stock
- ▼SCB recapitalisation crystallising under the new resolution regime
The banking book is frozen, 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 rather than thin. Neither number will move until Q2 disclosure lands the court-stayed loan stock that already understates the printed ratio. What is moving is the frame around the book: the resolution machinery keeps hardening, and the transmission gap is unchanged — the 30 July cut reached the money market and the bond belly, not the borrower. Private credit sits at a 33-year-low 4.98%: the money is there, the 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 holds 123.20; gold firms to $4,431 as the haven bid returns.
External Flow Balance
USD/BDT held 123.20 today; July flows are unchanged — exports $4.03bn, trade gap -$1.77bn — while reserves sit $36.42bn.
Reserves on the 31 Jul print, cover 6.28mo — 15 days old, the August refresh still awaited.
Treasury: the peg holds on a thin buffer — watch 123.20 and the overdue reserve refresh as gold and Brent tick back up.
WATCH
- ◆Whether 123.20 holds or the taka resumes its crawl if Brent presses back to $90
- ◆The overdue August reserve refresh past the $36.42bn 31 Jul print
- ◆Whether gold's rebound to $4,431 signals renewed risk-off
RISK
- ▼Reserves drawing down while earned dollars stay soft — remittance a second month under $3bn
- ▼Brent's premium over the $80 FY27 line re-widening the import bill
- ▼The premium US LNG cargo landing as a fresh claim on soft dollars
The taka's calm is real but shallow. USD/BDT held 123.20 even as the external tape turned back up — gold firmed to $4,431/oz and Brent to $88.54, the haven and war bids that had faded last week returning together. The peg is holding on a thin buffer, not a deep one: reserves at $36.42bn on the 31 Jul print, 15 days stale, import cover 6.28mo against a $1.77bn trade gap the $2.82bn July remittance no longer comfortably clears. The earned-dollar side is the pressure point — a second month of sub-$3bn remittance meets a climbing energy bill and a premium US LNG cargo. The desk position: respect 123.20 as a level, but treat the overdue reserve refresh as the real test — a print below $36bn would reprice the peg faster than any single day's spot.
DSE Markets
The market is shut; last session held DSEX at 5,897 on soft breadth.
DSEX Index
On the 13 Aug session DSEX closed 5,897, testing and failing 5,900; turnover held Tk1,074cr while breadth stayed soft at 119 up, 231 down.
The 5,822–5,897 window high; last session's 5,897 is the top of the range, still short of 5,900.
Equity desk: a liquidity rally that stalls at 5,900 on 231/119 breadth is a bull trap — fade unless turnover holds Tk1,000cr into a reclaim.
WATCH
- ◆Whether DSEX reclaims 5,900 on positive breadth or falls back into the 5,822–5,903 range
- ◆Turnover holding above Tk1,000cr — accumulation versus a fading liquidity spike
- ◆Bank and NBFI scrip as the resolution regime reprices financial float
RISK
- ▼A failed 5,900 breakout confirming a bull trap
- ▼Turnover slipping under Tk1,000cr, draining the rally of conviction
- ▼Soft breadth signalling the liquidity bid is narrowing, not broadening
T-Bonds & T-Bills
The 5y holds 9.15% after its richening; the bill front stays sub-policy.
BD Govt Yield Ladder
The 5y holds 9.15% after richening off a flat 9.68%; the bill front sits below policy at 9.19–9.33%, the 10y at 10.25%.
The 5y held 9.68% for eleven prints, then swung to 9.15% — the sharpest belly move in the window.
ALCO: 5s10s steepens near 110bp — price term funding to the stable front, watch belly supply into FY27.
WATCH
- ◆Whether the 5y holds 9.15% or the belly cheapens on FY27 supply
- ◆The next bill auction — whether the front resumes cutting or holds below policy
- ◆5s10s near 110bp — the slope repricing long-dated fixed-rate books
RISK
- ▼Belly volatility — the 5y's 64bp swing signals thin depth
- ▼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%; the 12m-avg still 8.68% on Jun.
CPI Trend
The CPI 12m-avg held 8.68% on the Jun print; food 8.6%, non-food 9.61% — the trailing read still elevated even as BB flags easing.
Highest since Dec 2025 (8.8% then) — the trailing average still above the 8.6% monthly food print.
MPC: the trailing average still elevated while private credit is dead at 4.98% — hold before easing further.
WATCH
- ◆The next 12m-avg print — whether the monthly turn pulls the trailing average down
- ◆Private credit at 4.98% — whether the 30 July cut revives borrowing
- ◆The August cooking-gas hike and Brent feeding cost-push into the next CPI print
RISK
- ▼Private credit at a 33-year-low 4.98% with M2 at 10.52% — liquidity present, demand absent
- ▼A razor-thin 0.34% real policy rate leaving no carry cushion post-cut
- ▼The August cooking-gas hike relighting cost-push before the inflation turn is confirmed
Remittance
July remittance holds $2.82bn, a second month under $3bn as the margin stalls.
Remittance Inflow
WATCH
- ◆Whether $2.82bn is a floor or the top of a slide after a second month under $3bn
- ◆The overdue August reserve refresh past the $36.42bn 31 Jul print
- ◆The Saudi flight entitlement rise to 84 — whether corridor capacity lifts inflows
RISK
- ▼Earned dollars softening while reserves draw and the energy bill climbs
- ▼The margin over the $1.77bn trade gap no longer growing
- ▼A second sub-$3bn month tipping into a slide
Remittance is the hinge of the external account, and it has gone quiet at the wrong moment. The July inflow held $2.82bn — a second consecutive month under $3bn — leaving roughly $1.05bn of monthly cover over the $1.77bn trade gap, a margin that has stopped widening just as the import side turns heavier. Reserves sat at $36.42bn on the 31 Jul print, import cover 6.28mo, and the August refresh is overdue; a print below $36bn would confirm the drain the soft remittance number implies. The energy bill is the pressure on the other side — a BPC subsidy claim, a premium US LNG cargo, restored LNG regas that still costs dollars. The desk read: this is not yet a break, but the taka's calm at 123.20 rests on a buffer no longer being topped up. Position defensive on the peg and watch the reserve refresh, not the spot.
Fiscal
NBR still stuck at Tk3.61tn while BB flags debt outrunning revenue.
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 BB flags debt outpacing receipts and a BPC subsidy claim widens the FY27 gap.
WATCH
- ◆The next monthly NBR print — the Tk3.61tn line has not moved in fourteen prints
- ◆The BPC Tk76b subsidy claim — whether it lands as bank borrowing or budget subsidy
- ◆Whether Brent's move keeps the FY27 fuel-subsidy provision widening
RISK
- ▼A thin revenue base carrying the FY27 gap as receipts stall at Tk3.61tn
- ▼Debt outpacing revenue — BB's own flag
- ▼Govt bank borrowing crowding private credit already at a 33-year-low 4.98%
Iran War & Oil
Brent firms to $88.54, back toward $90 and $8.54 above the FY27 line.
Brent Crude
Brent firmed to $88.54, WTI $82.36 — the spread near $6.18 — crude edging back toward $90 as last week's fade pauses.
Up from $86.91 a week ago and back near the midweek highs — still $8.54 above the $80 FY27 line.
Treasury: each dollar back on Brent re-widens the import bill and the FY27 subsidy claim — watch the $90 line.
WATCH
- ◆Whether Brent presses back through $90 or the fade resumes toward the $80 FY27 line
- ◆The FY27 fuel-subsidy provision with spot $8.54 over the $80 assumption
- ◆The BPC Tk76b subsidy claim and power cuts — how the energy bill is financed
RISK
- ▼A Gulf re-escalation carrying Brent through $90 onto the import bill and the peg
- ▼Crude plus freight stacking onto a $1.77bn trade gap
- ▼The August cooking-gas hike compounding energy cost-push into the next CPI print
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