Headlines
Government hunts external capital while remittance and exports stay 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)
The front holds sub-policy at 9.31%; the reserve read stays stale.
FX Reserves
Gross reserves $36.42bn as of the Jul 2026 print — up from $31.09bn in Nov 2025 but off the $37.58bn window high.
Rebuild stalled below the $37.58bn peak; net reserves $31.60bn, up from $26.40bn in Nov 2025.
Treasury: the August refresh is overdue — watch the next print to confirm the buffer is not draining.
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
- ◆The overdue reserve refresh past the 1 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 far under floor.
WATCH
- ◆Q2 2026 NPL disclosure landing the court-stayed loan overhang past the Q1 32.26% print
- ◆First recoveries under the new mediation track against the SCB (State-Owned Commercial Bank) 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 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: BB has floated loan-recovery mediation and an alternative dispute-resolution 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 read stays stale.
External Flow Balance
Exports $4.20bn as of the Jun 2026 print, off the $4.78bn window high; imports $6.11bn on the May read.
Exports above the $3.03bn window low but the import line runs $6.11bn — the external gap holds.
Treasury: earned dollars are not closing the gap — watch the reserve refresh as the sole buffer.
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 as both earned-dollar engines thin
RISK
- ▼Brent at $94.09 re-widening an import bill soft demand had masked
- ▼A reserve refresh below $36.42bn confirming the drain soft trade data imply
- ▼Both earned-dollar engines soft — remittance $2.86bn, exports $4.2bn on the Jun read
DSE Markets
DSEX eased to 5,769.71 over ten sessions on thin Tk733cr turnover.
DSEX Index
DSEX 5,769.71 as of the 20 Aug session — up from 5,389.17 a year earlier but off the 5,926.28 window high.
Well above the 4,702.69 window trough — this is a pullback within range, not a fresh low.
Equity desk: a drift on thin turnover is not capitulation — stay flat until volume returns on up days.
WATCH
- ◆Whether turnover recovers on up days or keeps thinning below Tk733cr
- ◆Breadth — 198 down to 140 up on the 20 Aug session
- ◆Foreign portfolio flows as the external bid stays thin
RISK
- ▼A drift lower on no volume inviting a sharper 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 benchmark 10y held 10.24% through the Jul 2026 monthly print; the 21 Aug spot has since rallied to 9.234%.
The monthly 10y sat flat at 10.24% across Jun–Jul 2026 before the recent spot break lower.
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 ~10.25% it sat at all window
- ◆The next bill auction — whether the 91d cuts below 9.03%
- ◆5s10s at ~8bp — the flat slope repricing long-dated fixed-rate books
RISK
- ▼A 10y round-trip back to ~10.25% 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 eases to 8.66%.
CPI Trend
CPI 12m-avg eased to 8.66% as of the Jul 2026 print — down from 9.95% a year earlier, near the 8.59% window low.
The trailing average sits just above its 8.59% window low; food p2p 7.16% on the Jul print.
MPC: the trailing average is still elevated while private credit is dead at 4.98% — hold before easing further.
WATCH
- ◆The next 12m-avg print — whether the easing trend pulls the trailing average below 8.66%
- ◆Private credit at 4.98% — whether soft imports keep working-capital demand absent
- ◆Brent's $94.09 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 0.84% real policy rate leaving little carry cushion post-cut
- ▼Brent at $94.09 relighting cost-push before the inflation turn confirms
Remittance
July remittance held $2.86bn — a second straight month under $3bn.
Remittance Inflow
Remittance $2.86bn as of the Jul 2026 print — off the $3.76bn window high, a second month under $3bn.
Up from the $2.42bn window low in Aug 2025 but sliding from the $3.76bn peak — momentum rolling over.
Treasury: earned-dollar cover thinning as the oil bill rises — watch whether $2.86bn is a floor or a slide.
WATCH
- ◆Whether $2.86bn 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 at $94.09 lifting the import bill against a soft inflow side
RISK
- ▼Earned dollars softening while reserves draw and Brent's $94.09 lifts the energy bill
- ▼The margin over the import bill 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 $2.86bn — a second straight month under $3bn — and it is well off the $3.76bn high the series reached over the past year. The other side of the runway is widening: Brent holds $94.09, up from a $71.18 window low, lifting the import bill soft demand had masked. And the buffer behind both is stale — reserves last printed $36.42bn on the 31 Jul print, cover 5.96mo on the May read, the August refresh overdue. Neither engine is broken; exports hold $4.2bn on the Jun read, 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 held at Tk3.61tn while the fuel-subsidy claim grows.
NBR Tax Revenue
Monthly NBR revenue Tk28,027cr as of the Oct 2025 print, up from Tk22,005cr in Jul 2023 but far below the Tk52,720cr peak.
The Oct 2025 monthly print sits mid-range; the Tk52,720cr peak reflects fiscal-year-end seasonality.
Treasury: the monthly run-rate is not lifting the YTD line — the FY gap widens from the spending side as Brent holds $94.09.
WATCH
- ◆The next monthly NBR print — the Tk3.61tn line has not refreshed
- ◆The fuel-subsidy claim as Brent holds $94.09
- ◆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 holds $94.09, well up from its $71.18 window low.
Brent Crude
Brent $94.09 as of the 22 Aug print — recovered from a $71.18 window low toward the $100.38 window high.
Down from $100.21 in late May but well up off the $71.18 trough — crude back near range top.
Treasury: each dollar on Brent re-widens the import bill and the fuel-subsidy claim — watch whether $94.09 holds above $90.
WATCH
- ◆Whether Brent holds $94.09 or fades back toward its $71.18 window low
- ◆The FY27 fuel-subsidy provision as spot holds above $90
- ◆Non-food CPI at 9.61% on the Jun read — energy cost-push not yet in the base
RISK
- ▼Brent above $90 stacking crude plus freight onto the import bill
- ▼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 read into the book, with the widest reach. Brent holds $94.09 and WTI $86.85 — the barrel has climbed off a $71.18 window low and now sits near the top of its three-month range. The transmission into Bangladesh is direct and compounding: each dollar re-widens an import bill the earned-dollar side already strains to cover, with July remittance at $2.86bn and exports $4.2bn on the Jun read. It also threatens the inflation turn the MPC awaits — non-food CPI 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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