Headlines
Energy costs and soft dollar inflows dominate as the political transition settles.
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)
The front holds sub-policy at 9.31%; the reserve check stays overdue.
FX Reserves
WATCH
- ◆Deposit-rate pass-through as the sub-policy front reaches term funding into H2
- ◆Whether the front cuts again or holds at the next MPC after the 30 July 50bp move
- ◆The overdue reserve refresh past the 31 Jul $36.42bn print
RISK
- ▼The easy corridor reaching the money market but not the 4.98% private-credit borrower
- ▼Deposit rates lagging the falling bill curve, squeezing bank margins into H2
- ▼A weak reserve refresh repricing the peg behind an easy front
Banking
The book holds frozen — NPL 32.26% on Q1, CAR 844bp under floor.
WATCH
- ◆Q2 2026 NPL disclosure landing the court-stayed loan overhang past the 32.26% Q1 print
- ◆First recoveries under the new mediation and ADR track against the SCB tail
- ◆Bank deployment as private credit holds 4.98% — demand, not liquidity, the constraint
RISK
- ▼Court-stayed loan stock understating the printed 32.26% Q1 NPL ratio
- ▼SCB (State-Owned Commercial Bank) recapitalisation crystallising under the resolution regime
- ▼Weak sheets unable to out-grow their bad-loan stock at 4.98% private credit
The banking book is unchanged and the freeze is still the story: NPLs 32.26% on the Q1 2026 print, system CAR 1.56% on Q3 2025 — 844bp below the 10% floor, a cushion gone rather than thin. Neither number moves until Q2 disclosure lands the court-stayed loan stock that already understates the headline. What moves is the scaffolding around it: BB has unveiled loan-recovery mediation and an ADR track, and the sell-side is running 'how the sector stabilised' copy. All of it repairs the tail; none of it restarts the engine. Private credit sits at 4.98% — liquidity is not the constraint, creditworthy demand is. Dispersion stays the trade: own the private compounders, fade the SCB paper the resolution regime tests first.
FX & External
Taka firm at 122.07 on soft demand; the reserve refresh stays overdue.
External Flow Balance
USD/BDT firmed to 122.07 on soft importer demand; reserves held $36.42bn against a $1.77bn trade gap, exports at $4.03bn.
Reserves on the 31 Jul print, cover 6.28mo — the August refresh still awaited 22 days on.
Treasury: the peg's calm is demand-led, not earnings-led — with Brent through $94, watch the reserve refresh over the daily spot.
WATCH
- ◆Whether 122.07 holds or the crawl resumes as Brent's $94.09 lifts import demand
- ◆The overdue reserve refresh past the 31 Jul $36.42bn print
- ◆Remittance and export receipts — the earned-dollar side as both engines thin
RISK
- ▼Brent through $94 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, exports $4.03bn
DSE Markets
DSEX at a fresh low of 5,769.71 on record-thin Tk733cr turnover.
DSEX Index
DSEX closed the last session at a fresh window low of 5,769.71 as turnover caved to Tk733cr; breadth 140 up, 198 down.
A fresh low across the 5,770–5,897 window — the 5,822 level that broke early week now sits above.
Equity desk: a fresh low on record-thin turnover is exhaustion, not a bottom — stay flat until volume returns on up days.
WATCH
- ◆Whether turnover recovers on up days or keeps thinning below Tk733cr
- ◆Breadth holding its 140/198 repair or rolling back toward the 54/318 washout
- ◆Foreign portfolio flows as the external bid stays thin
RISK
- ▼A fresh low on no volume inviting the next leg once a seller appears
- ▼Tk733cr turnover signalling participation has drained, not stabilised
- ▼Post-transition policy uncertainty keeping domestic risk appetite sidelined
T-Bonds & T-Bills
The 10y eased to 9.23%; 5s10s flattened to just ~8bp.
BD Govt Yield Ladder
The 10y eased to 9.23% from 9.42%, extending its break from a static 10.24%; 5s10s now just ~8bp against a 5y at 9.15%.
The 10y sat at 10.24–10.25% all window until it broke last week; the front has cut at recent auctions.
ALCO: 5s10s at ~8bp offers no term premium — fund term to the falling front, but confirm the long-end move before extending duration.
WATCH
- ◆Whether the 10y's 9.23% holds or mean-reverts toward the 10.24% it sat at all window
- ◆The next bill auction — whether the 91d cuts below 9% from 9.03%
- ◆5s10s at ~8bp — the flat slope repricing long-dated fixed-rate books
RISK
- ▼A 10y round-trip back to 10.24% if the rally proves a marks artifact
- ▼Belly and long supply into FY27 re-steepening the curve
- ▼Deposit and lending rates lagging the falling bill curve, squeezing margins
Macro & Inflation
Private credit stalled at 4.98% while the 12m-avg holds 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 keep working-capital demand absent
- ◆Brent's $94.09 break feeding energy cost-push into the next CPI print
RISK
- ▼Private credit at 4.98% with M2 at 10.52% — liquidity present, demand absent
- ▼A thin 0.34% real policy rate leaving little carry cushion post-cut
- ▼Brent through $94 relighting cost-push before the inflation turn confirms
Remittance
July remittance held $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 reserve refresh past the 31 Jul $36.42bn print
- ◆Brent above $94 lifting the import bill against a soft inflow side
RISK
- ▼Earned dollars softening while reserves draw and Brent's $94 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
Remittance is the earned-dollar engine that has to cover the gap the trade account cannot, and it is losing altitude. July printed $2.82bn — a second straight month under $3bn — and the margin it clears over the $1.77bn trade gap has stopped growing at roughly $1.05bn. The other side of the runway is widening: Brent has pressed to $94.09, $14.09 above the $80 FY27 line, lifting the import bill soft demand had masked. And the buffer behind both is stale — reserves last printed $36.42bn on 31 Jul, cover 6.28mo, the August refresh three weeks overdue. Neither engine is broken; exports hold $4.03bn, the taka is firm at 122.07. But the trajectory has turned: inflows flat, the oil bill rising, the reserve check unpaid. The book stays defensive on the peg — long reserve visibility, reading a firm taka as demand weakness, not dollar strength.
Fiscal
NBR stuck at Tk3.61tn across fourteen reads while the fuel claim grows.
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 Brent at $94.09 widens the FY27 fuel claim — the gap widens from the spending side.
WATCH
- ◆The next monthly NBR print — the Tk3.61tn line has not moved in fourteen reads
- ◆The fuel-subsidy claim as Brent holds $14.09 above the $80 FY27 assumption
- ◆Govt bank borrowing crowding private credit already at 4.98%
RISK
- ▼A thin revenue base carrying the FY27 gap as receipts stall at Tk3.61tn
- ▼The energy-subsidy claim widening as Brent holds above $90
- ▼A narrow tax net capping any near-term revenue lift
Iran War & Oil
Brent pressed to $94.09, now $14.09 above the $80 FY27 line.
Brent Crude
Brent pressed to $94.09, WTI $86.85 — crude extending its break above $90 rather than fading toward the $80 FY27 line.
Up from $93.69 last session and now $14.09 above the $80 FY27 line — a sustained push through $90.
Treasury: each dollar on Brent re-widens the import bill and the FY27 subsidy claim — the $90 break holds, watch $95.
WATCH
- ◆Whether Brent presses on above $94.09 toward $95 or fades to the $80 FY27 line
- ◆The FY27 fuel-subsidy provision with spot now $14.09 over the $80 assumption
- ◆Non-food CPI at 9.61% on the Jun read — energy cost-push not yet in the base
RISK
- ▼Brent above $94 stacking crude plus freight onto a $1.77bn trade gap
- ▼Energy cost-push compounding into the next CPI print with non-food already 9.61%
- ▼A Gulf re-escalation carrying Brent higher onto the import bill and the peg
Crude is the day's cleanest one-way trade, with the widest reach into the book. Brent broke $90 and has pressed to $94.09, WTI $86.85 — the level that capped it now sits below, and the move is extending rather than fading toward the $80 FY27 assumption it is now $14.09 above. The transmission into Bangladesh is direct and compounding: each dollar re-widens an import bill a $1.77bn trade gap already strains, and lifts a fuel-subsidy claim the FY27 budget provisioned at $80. It also threatens the inflation turn the MPC awaits — non-food CPI already prints 9.61% on the Jun read, energy cost-push not yet in the base. Crude is now the swing variable across FX, fiscal and macro at once — position for a wider import bill and a later, shallower easing path if Brent holds above $90 into the next prints.
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