Headlines
Dollar demand softens the taka firmer while foreign bids and inflows keep thinning.
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 easy at 9.36%; the 14-day tightens to 10.75%, nearing the ceiling.
FX Reserves
WATCH
- ◆Whether the 14-day breaches the 11.00% SLF ceiling or eases as month-end passes
- ◆Deposit-rate pass-through as the sub-policy bill front 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
- ▼Term tightness in the 14-day repricing corporate roll funding into month-end
- ▼A weak reserve refresh repricing the peg behind an easy corridor
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
- ◆Midas Financing and non-bank finance liquidity gaps as the resolution regime is tested
- ◆RMG export-sector loan performance as EU demand falls 16.4% in H1
RISK
- ▼Court-stayed loan stock understating the printed 32.26% Q1 NPL ratio
- ▼Distress spreading from Midas Financing into the wider non-bank book
- ▼SCB (State-Owned Commercial Bank) 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 moves is the forward vector, and it is broadening: RMG exports to the EU fell 16.4% in H1, thinning receivables, while Midas Financing's auditor flags a liquidity gap and warns on client confidence — non-bank finance distress at name level as the resolution regime is tested. Private credit at a 33-year-low 4.98% says weak sheets cannot out-grow their bad-loan stock. Dispersion stays the trade: own the private compounders, fade the SCB paper resolution tests first.
FX & External
Taka firms to 122.78 on soft dollar demand; gold rebounds to $4,437.
External Flow Balance
USD/BDT firmed to 122.78 from 123.20 as importer dollar demand ebbed; reserves $36.42bn, the export line soft against a $1.77bn trade gap.
Reserves on the 31 Jul print, cover 6.28mo — 17 days old, the August refresh still awaited.
Treasury: the peg's calm is demand-led, not earnings-led — watch the reserve refresh over the daily spot as inflows thin.
WATCH
- ◆Whether 122.78 holds or the crawl resumes if import demand recovers ahead of inflows
- ◆The overdue August reserve refresh past the 31 Jul $36.42bn print
- ◆Remittance and RMG receivables — the earned-dollar side as inflows thin
RISK
- ▼Demand-led taka strength masking a reserve buffer no longer topped up
- ▼A reserve refresh below $36bn confirming the drain soft trade data imply
- ▼Earned dollars softening — remittance $2.82bn, RMG-to-EU off 16.4% — as imports recover
The taka's strength is real but its source matters. USD/BDT firmed to 122.78 from 123.20 — not on a surge of earned dollars but because importer demand ebbed, a cooling economy drawing fewer letters of credit as private credit sits at a 33-year-low 4.98%. That is demand-led calm, and it flatters a buffer not being topped up. The inflow side thins in parallel: July remittance held $2.82bn, a second month under $3bn, and RMG exports to the EU fell 16.4% in H1. Reserves stood 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 122.78 as a level, but treat the reserve refresh, not the daily spot, as the real test — the peg holds on a buffer soft imports are masking, not inflows are rebuilding.
DSE Markets
Turnover recovers above Tk1,000cr but on a down day — breadth collapses to 102/247.
DSEX Index
DSEX slipped 0.41% to 5,859.98, breaking below 5,884; turnover recovered to Tk1,131cr but breadth collapsed to 102 up, 247 down.
The 5,822–5,897 window range; 5,860 sits near the lower edge after the 5,900 breakout failed twice.
Equity desk: rising turnover on a down day with breadth this negative is distribution — fade until breadth reclaims parity above 5,884.
WATCH
- ◆Whether DSEX holds 5,822 or the break extends after cracking 5,884
- ◆Turnover quality — whether Tk1,000cr volume comes on up days or down
- ◆Foreign portfolio flows, reported still falling, as the external bid thins
RISK
- ▼Rising turnover on negative breadth confirming distribution, not accumulation
- ▼A break of 5,822 opening the next leg down
- ▼Foreign selling compounding soft domestic breadth
T-Bonds & T-Bills
The 5y cheapens back to 9.35%; 5s10s flattens to 89bp, the bill front sub-policy.
BD Govt Yield Ladder
The 5y cheapened to 9.35% from the 9.15% it held for three prints; the 10y sits at 10.24%, the bill front sub-policy at 9.19–9.33%.
The 5y round-tripped 9.68% → 9.15% → 9.35% across the window — the belly the curve's only mover.
ALCO: 5s10s flattens to ~89bp as the belly cheapens — price term funding to the stable front, watch belly supply into FY27.
WATCH
- ◆Whether the 5y settles at 9.35% or the belly re-richens toward 9.15%
- ◆The next bill auction — whether the front resumes cutting or holds sub-policy
- ◆5s10s near 89bp — the slope repricing long-dated fixed-rate books
RISK
- ▼Belly volatility — the 5y's round-trip from 9.15% to 9.35% signals thin depth
- ▼Belly supply into FY27 cheapening the 5y further
- ▼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 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 soft imports and RMG's slump keep working-capital demand absent
- ◆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 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
The earned-dollar engine is idling. July remittance held $2.82bn — a second straight month under $3bn, flat across the window — and it is not alone: RMG exports to the EU fell 16.4% in H1. Both hard-currency engines are soft at once. What masks it is the demand side: USD/BDT firmed to 122.78 as importer dollar demand ebbed — a cooling economy, private credit dead at a 33-year-low 4.98%, drawing fewer dollars than it earns. That is why the peg looks calm. But calm built on weak imports is not calm built on strong inflows. Reserves stood at $36.42bn on the 31 Jul print, cover 6.28mo, the August refresh overdue, and remittance's margin over the $1.77bn trade gap has flattened near $1.05bn. The book reads the runway as finite: long 122.78, but positioned for the reserve refresh, not the daily spot, to set direction.
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 export base narrows the tax take.
WATCH
- ◆The next monthly NBR print — the Tk3.61tn line has not moved in fourteen reads
- ◆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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