Headlines
RMG's EU slump and exporter energy stress lead a credit-cycle tape.
Today's tape runs on a single thread: the credit cycle is turning where Bangladesh earns its dollars. RMG exports to the EU, the largest apparel market, fell 16.4% in H1, and exporters are asking to spread July-August utility bills over twelve months — working-capital stress at the export coalface that lands on back-to-back LC lines before it reaches a quarterly NPL print. That strain meets a book with no give: private credit dead at a 33-year-low 4.98%, NPLs 32.26% on the Q1 read, the capital cushion already gone. Easing gas supply and Adamjee EPZ clearing $1b are the offsets; the Tk24cr phantom-export fraud and the grid strain say the pressure is broadening, not lifting. The desk stays defensive on export-linked credit, positioned for the Q2 print and softening RMG receivables rather than the easy front.
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 the corridor; no fresh cut since 30 July.
FX Reserves
WATCH
- ◆Whether the 14-day holds inside the SLF ceiling into month-end or term tightness returns
- ◆Deposit-rate pass-through as the sub-policy bill curve reaches term funding
- ◆The overdue reserve refresh — the external check behind the easy front
RISK
- ▼The 30 July cut reaching the curve but not the 4.98% private-credit borrower
- ▼A weak reserve print repricing the peg behind an easy corridor
- ▼A 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
- ◆RMG export-sector loan performance as EU demand falls 16.4% in H1
- ◆Whether the Bank Resolution Act accelerates SCB recapitalisation or forbearance
RISK
- ▼Court-stayed loan stock understating the printed 32.26% Q1 NPL ratio
- ▼RMG-heavy books repricing as EU orders and export receivables soften
- ▼SCB recapitalisation crystallising under the new resolution regime
The banking book is frozen and the freeze is the story: NPLs 32.26% on the Q1 2026 read, system CAR 1.56% on Q3 2025 — 844bp below the 10% floor, a cushion gone rather than thin. Neither moves until Q2 disclosure lands the court-stayed loan stock that already understates the printed ratio. What is moving is the forward vector. RMG exports to the EU, the largest apparel market, fell 16.4% in H1, and exporters are asking to spread July-August utility bills over twelve months — working-capital stress at the export coalface that lands on back-to-back LC lines before it reaches a quarterly NPL print. Private credit at a 33-year-low 4.98% says weak sheets cannot out-grow their bad-loan stock as the export engine cools. Dispersion stays the trade: own the private compounders, fade the SCB (state-owned commercial bank) paper the resolution regime tests first.
FX & External
Taka steady at 123.20; gold slips to $4,380 as the haven bid fades.
External Flow Balance
USD/BDT held 123.20; the export line softens — RMG to the EU fell 16.4% in H1 — against a $1.77bn trade gap and $36.42bn reserves.
Reserves on the 31 Jul print, cover 6.28mo — 16 days old, the August refresh still awaited.
Treasury: the peg holds on a thin buffer — watch 123.20 and the overdue reserve refresh as export earnings soften.
WATCH
- ◆Whether 123.20 holds or the crawl resumes if the export line keeps softening
- ◆The overdue August reserve refresh past the 31 Jul $36.42bn print
- ◆RMG receivables as EU orders fall 16.4% — the earned-dollar side thins
RISK
- ▼Export earnings weakening as RMG-to-EU falls 16.4% while reserves draw down
- ▼A reserve print below $36bn repricing the peg faster than any day's spot
- ▼Brent near $88.52 re-widening the import bill over the $80 FY27 line
The taka's calm is real but shallow. USD/BDT held 123.20 even as the haven bid faded — gold eased to $4,380/oz from $4,431 — leaving the external account leaning on earned dollars that are thinning. That is the pressure point. RMG exports to the EU, the largest apparel market, fell 16.4% in H1, and exporters are seeking to spread July-August utility bills over twelve months; both point to a softer export line into a $1.77bn trade gap that a second sub-$3bn remittance month no longer comfortably clears. Reserves sat at $36.42bn on the 31 Jul print, cover 6.28mo, and the August refresh is overdue — a figure below $36bn would confirm the drain the soft trade data imply. The desk position: respect 123.20 as a level, but treat the reserve refresh, not the daily spot, as the real test — the peg holds on a buffer no longer being topped up.
DSE Markets
The 5,900 retest failed; DSEX slips to 5,884 as turnover drains under Tk1,000cr.
DSEX Index
DSEX slipped 0.23% to 5,883.91, falling back from the 5,897 retest of 5,900; turnover drained to Tk926cr, breadth soft at 135 up, 182 down.
The 5,822–5,897 window range; 5,884 sits mid-range, the 5,900 breakout rejected for a second session.
Equity desk: a liquidity rally that stalls at 5,900 with turnover under Tk1,000cr is a bull trap — fade unless breadth and turnover turn.
WATCH
- ◆Whether DSEX reclaims 5,900 on positive breadth or slides back through 5,822
- ◆Turnover reclaiming 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 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 10.24%.
The 5y held 9.68% for eleven prints, then swung to 9.15% — the sharpest belly move in the window.
ALCO: 5s10s steepens near 109bp — 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 109bp — the slope repricing long-dated fixed-rate books
RISK
- ▼Belly volatility — the 5y's swing from 9.68% 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 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 RMG's export slump keeps working-capital demand soft
- ◆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
The macro read is one sentence stretched across eight prints: the money is there, the borrowers are not. Private credit growth sits at a 33-year-low 4.98% while M2 runs 10.52% on the Feb read — highest since Apr 2022 (10.9% then) — liquidity present, demand absent. The demand side is where today's news lands: RMG exporters, the largest hard-currency earners, are asking to spread July-August utility bills over twelve months as EU orders fall 16.4% in H1. Firms managing a cash-flow squeeze do not draw new working-capital lines. BB cut on 30 July, but the real policy rate is razor-thin at 0.34% on the Jun read and the CPI 12m-avg still prints 8.68% — highest since Dec 2025 (8.8% then). The desk read: hold before easing further — another cut buys liquidity the credit channel is not using.
Remittance
July remittance holds $2.82bn, a second straight month under $3bn.
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 31 Jul $36.42bn print
- ◆RMG's EU slump compounding soft remittance on the earned-dollar side
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
Fiscal
NBR still stuck at Tk3.61tn while BB flags debt outrunning revenue.
NBR Tax Revenue
Monthly NBR revenue 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 softening RMG export base narrows the tax take.
WATCH
- ◆The next monthly NBR print — the Tk3.61tn line has not moved in fourteen prints
- ◆Whether RMG's EU slump erodes export-linked tax and duty receipts
- ◆Govt bank borrowing crowding private credit already at a 33-year-low 4.98%
RISK
- ▼A thin revenue base carrying the FY27 gap as receipts stall at Tk3.61tn
- ▼Debt outpacing revenue — BB's own flag
- ▼Energy-subsidy claims pressing a budget with no revenue cushion
Iran War & Oil
Brent holds $88.52, $8.52 above the FY27 line as the relief stays paused.
Brent Crude
Brent held $88.52, WTI $82.40 — the spread near $6.12 — crude parked below $90 as last week's fade stays paused.
Roughly flat on the week and still $8.52 above the $80 FY27 line — no move back toward the assumption.
Treasury: each dollar 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 $8.52 over the $80 assumption
- ◆Exporter utility-bill relief and gas supply — 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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