Headlines
A $1bn soft loan tops the buffer as Brent breaks $90, inflows still soft.
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 easy at 9.37%; the 14-day falls back to 9.31%, tightness gone.
FX Reserves
WATCH
- ◆Whether the front resumes cutting or holds after the 91d fell to 9.03%
- ◆Deposit-rate pass-through as the sub-policy bill front reaches term funding
- ◆The overdue reserve refresh past the 31 Jul $36.42bn print — the external check behind the easy front
RISK
- ▼The 30 July cut reaching the money market but not the 4.98% private-credit borrower
- ▼A weak reserve refresh repricing the peg behind an easy corridor
- ▼Deposit rates lagging the falling bill curve, squeezing bank margins
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
- ◆Tk12,000cr in interbank LC-guarantee litigation as trade-finance disputes lock liquidity
- ◆SCB (State-Owned Commercial Bank) recapitalisation crystallising under the new resolution regime
RISK
- ▼Court-stayed loan stock understating the printed 32.26% Q1 NPL ratio
- ▼Tk12,000cr locked in interbank LC-guarantee disputes freezing trade-finance liquidity
- ▼RMG export-sector loan performance as EU demand falls 16.4% in H1
The banking book is frozen and the freeze is the story: NPLs 32.26% on the Q1 2026 read, system CAR (Capital Adequacy Ratio) 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 Tk12,000cr sits locked in interbank LC-guarantee litigation — trade-finance disputes freezing liquidity at the plumbing level. 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 the resolution regime tests first.
FX & External
Taka firms to 122.60 on soft demand; the reserve refresh stays overdue.
External Flow Balance
USD/BDT firmed to 122.60 from 122.78 as importer dollar demand stayed soft; reserves $36.42bn, the export line soft against a $1.77bn trade gap.
Reserves on the 31 Jul print, cover 6.28mo — 18 days old, the August refresh still awaited.
Treasury: the peg's calm is demand-led, not earnings-led — with Brent through $90, watch the reserve refresh over the daily spot.
WATCH
- ◆Whether 122.60 holds or the crawl resumes as Brent's $90 break lifts import demand
- ◆The overdue August reserve refresh past the 31 Jul $36.42bn print
- ◆Remittance and RMG receivables — the earned-dollar side as inflows thin
RISK
- ▼Brent above $90 re-widening an import bill soft demand had been masking
- ▼A reserve refresh below $36bn confirming the drain soft trade data imply
- ▼Both earned-dollar engines soft — remittance $2.82bn, RMG-to-EU off 16.4%
DSE Markets
DSEX breaks the 5,822 floor to 5,814; breadth collapses to 54 up, 318 down.
DSEX Index
DSEX slipped 0.78% to 5,814.27, breaking the 5,822 floor; turnover fell below Tk1,000cr to Tk995cr as breadth collapsed to 54 up, 318 down.
The 5,822–5,897 window range; 5,814 is a fresh low after the floor that held yesterday gave way.
Equity desk: a floor break on thin turnover with breadth this negative signals breakdown, not a dip — stay flat until breadth reclaims parity.
WATCH
- ◆Whether 5,814 holds or the break extends now that the 5,822 floor is gone
- ◆Turnover quality — whether volume returns on up days or keeps thinning on down
- ◆Foreign portfolio flows, reported still falling, as the external bid thins
RISK
- ▼The 5,822 break opening the next leg down with breadth this thin
- ▼Foreign selling compounding a domestic bid already down to 54 advancers
- ▼Distribution confirmed if any turnover recovery comes on down days
T-Bonds & T-Bills
The 5y richens back to 9.15%; the 91d bill cuts to 9.03%, front sub-policy.
BD Govt Yield Ladder
The 91d bill cut to 9.03% from 9.19% and the 5y re-richened to 9.15% from 9.35%; the 10y held 10.24%, the front sub-policy.
The 5y round-tripped 9.68% → 9.35% → 9.15% across the window; the front has cut at every recent auction.
ALCO: 5s10s steepens to ~109bp as the belly richens and the front falls — price term funding to the front, watch belly supply into FY27.
WATCH
- ◆Whether the 5y holds 9.15% or the belly round-trips back to 9.35%
- ◆The next bill auction — whether the front cuts below 9% at 91d
- ◆5s10s near 109bp — the slope repricing long-dated fixed-rate books
RISK
- ▼Belly volatility — the 5y's 9.35%↔9.15% round-trips signalling thin depth
- ▼Belly supply into FY27 cheapening the 5y again
- ▼Deposit and lending rates lagging the falling bill curve, squeezing 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 keeps 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 from 8.68%
- ◆Private credit at 4.98% — whether soft imports and RMG's slump keep working-capital demand absent
- ◆The August cooking-gas hike and Brent's $90 break 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
- ▼Brent through $90 and the cooking-gas hike relighting cost-push before the inflation turn confirms
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
- ◆Brent above $90 lifting the import bill against a soft inflow side
RISK
- ▼Earned dollars softening while reserves draw and Brent's $90 break lifts the energy bill
- ▼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 and the wind has turned against it. July remittance held $2.82bn — a second straight month under $3bn, flat across the window — and RMG exports to the EU fell 16.4% in H1: both hard-currency engines soft at once. What masks that is the demand side — USD/BDT firmed to 122.60 as importer dollar demand ebbed, a cooling economy with private credit dead at a 33-year-low 4.98% drawing fewer dollars than it earns. But calm built on weak imports is not calm built on strong inflows. Now the external side turns: Brent broke $90 to $90.74, re-widening an import bill soft demand had been narrowing, just as reserves sit at $36.42bn on the 31 Jul print with the August refresh overdue and remittance's margin over the $1.77bn trade gap near $1.05bn. The book stays long 122.60, positioned for the reserve refresh — not the daily spot — to set direction.
Fiscal
NBR still stuck at Tk3.61tn as over 90% of economic units file no TIN.
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 over 90% of units file no TIN and a softening export base narrows the 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
- ▼Over 90% of economic units outside the TIN net capping any revenue lift
- ▼Debt outpacing revenue — BB's own flag
Iran War & Oil
Brent breaks $90 to $90.74, now $10.74 above the FY27 line.
Brent Crude
Brent broke $90 to $90.74, WTI $84.44 — the spread near $6.30 — crude reversing last week's fade rather than fading to the $80 line.
Up from $88.52 last print and now $10.74 above the $80 FY27 line — the first push through $90.
Treasury: each dollar on Brent re-widens the import bill and the FY27 subsidy claim — the $90 line has broken, watch $95.
WATCH
- ◆Whether Brent presses on above $90 or the fade resumes toward the $80 FY27 line
- ◆The FY27 fuel-subsidy provision with spot now $10.74 over the $80 assumption
- ◆Exporter utility-bill relief and gas supply — how the energy bill is financed
RISK
- ▼Brent above $90 stacking crude plus freight onto a $1.77bn trade gap
- ▼The August cooking-gas hike compounding energy cost-push into the next CPI print
- ▼A Gulf re-escalation carrying Brent higher onto the import bill and the peg
The relief is over: Brent broke $90 to $90.74 and WTI $84.44, reversing the fade that had parked crude below $90 for a week. That matters more for Bangladesh than the tape suggests. The country imports nearly all its fuel, so every dollar on Brent lands twice — first on the import bill a $1.77bn trade gap already strains, then on the FY27 fuel-subsidy provision built on an $80 assumption crude now sits $10.74 above. The timing compounds it: the August cooking-gas hike is already in train, so energy cost-push is rebuilding just as the CPI 12m-avg sits at 8.68% on the Jun print and private credit is dead at 4.98%. The oil break is the external counterweight to the demand-led calm holding the peg — watch H2 energy-importer receivables and the next subsidy claim. Treasury should price the reserve buffer, not the daily spot, as the real constraint.
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