Headlines
Liquidity drains from the tape as turnover collapses and demand stays absent.
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)
Call front sits below policy; the reserve read is weeks old.
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 as of Jul 2026, up from $26.40bn in Nov 2025.
Treasury: the reserve rebuild has flattened since the Jul print — watch the next read to confirm the buffer holds above $36bn.
WATCH
- ◆Whether the 14-day call holds above the 11.0% SLF ceiling as term funding stays tight into H2
- ◆Deposit-rate pass-through as the sub-policy front reaches term funding
- ◆The next reserve read past the 1 Jul $36.42bn print
RISK
- ▼The easy overnight corridor not reaching the 4.98% private-credit borrower
- ▼Deposit rates lagging the falling bill curve, squeezing bank margins into H2
- ▼A soft reserve read repricing the peg behind an easy front
Banking
Asset quality frozen — no move until Q2 disclosure lands the stayed-loan stock.
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 as the resolution regime tests weak sheets
- ▼Weak balance sheets unable to out-grow their bad-loan stock at 4.98% private credit
The banking book is unchanged and the freeze remains the story: NPLs at 32.26% on the Q1 2026 print, system CAR at 1.56% on the Q3 2025 read — far under the 10% regulatory floor. Neither number will move 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 Sammilito Islami Bank opens principal withdrawals from 1 September as weak sheets get restructured. All of it works on the tail; none of it restarts the engine. Private credit sits at 4.98% — liquidity is not the binding constraint, creditworthy demand is, and the same freeze is now draining equity turnover. Dispersion stays the trade: own the private compounders and fade the SCB paper the resolution regime tests first.
FX & External
Taka holds 122.77 on soft demand; reserves last read 31 July.
External Flow Balance
Exports $4.20bn as of the Jun 2026 print, below the $4.78bn window high, while imports hit a series-high $7.51bn.
Imports at a series high since Aug 2024 while exports stay mid-range — the external gap runs at its widest.
Treasury: earned dollars are not closing the gap — watch the reserve read as the sole buffer.
WATCH
- ◆Whether 122.77 holds or the crawl resumes as Brent's $87.26 lifts import demand
- ◆The next reserve read past the 31 Jul $36.42bn print
- ◆The June trade gap at -$3.31bn — whether soft imports keep it from re-widening
RISK
- ▼Brent at $87.26 re-widening an import bill soft demand had masked
- ▼A reserve read below $36bn confirming the drain soft trade data imply
- ▼Both earned-dollar engines soft — remittance $2.86bn on the Jul print, exports $4.20bn on the Jun read
DSE Markets
DSEX flat at 5,640 but turnover has drained 58% over fifteen sessions.
DSEX Index
DSEX 5,640 as of the 25 Aug session — up from 5,449 a year earlier but off the 5,926 window high.
Well above the 4,703 window low of the past year — a pullback within range, not a fresh low.
Equity desk: a drift on thin Tk507cr turnover is not capitulation — stay flat until volume returns on up days.
WATCH
- ◆Whether turnover recovers on up days or keeps thinning below Tk507cr
- ◆Whether the mildly positive 175/152 breadth holds once a seller tests the thin bid
- ◆Foreign portfolio flows as the external bid stays thin
RISK
- ▼A drift lower on no volume inviting a sharper leg once a seller appears
- ▼Tk507cr turnover signalling participation has drained, not stabilised
- ▼Post-transition policy uncertainty keeping domestic risk appetite sidelined
The equity tape is the cleanest read this issue on a system holding cash it will not deploy. DSEX closed at 5,640 on 25 Aug, flat on the day and a ten-session low, but still well above the 4,703 trough of the past year — this is a drift, not a break. What has broken is participation: turnover has fallen 58% over fifteen sessions to Tk507cr, the thinnest of the run. Breadth was mildly positive at 175 advancers to 152 decliners, so the flat close reflects an absence of buyers rather than a wave of sellers. The same demand freeze runs through the loan book, where private credit growth has stalled at 4.98% against ample system liquidity — money is sitting in deposits, not rotating into risk. The desk stays flat on domestic equity until volume returns on up days; a thin tape that grinds lower offers no edge, and a rally on no turnover is not to be trusted.
T-Bonds & T-Bills
The 10y rallied 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 9.23%.
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 10.24% it sat at earlier
- ◆The next bill auction — whether the 91d cuts below 8.83%
- ◆5s10s at ~8bp — the flat slope repricing long-dated fixed-rate books
RISK
- ▼A 10y round-trip back toward 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 stuck 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% in Aug 2024, near the 8.59% series low.
Trailing average near its 8.59% window low; M2 growth 11.11% — highest since Sep 2021 (11.2% then).
MPC: the 12m-avg still elevated near 8.66% while private credit stalls at 4.98% — hold before easing further.
WATCH
- ◆The next 12m-avg print — whether the easing pulls the trailing average below its 8.59% window low
- ◆Private credit at 4.98% — whether soft imports keep working-capital demand absent
- ◆REER (Real Effective Exchange Rate) 102.78 on the Mar print — highest since Nov 2025 (103.55 then), keeping the taka dear
RISK
- ▼Private credit 4.98% against M2 at 11.11% — liquidity present, demand absent
- ▼A thin 1.68% real policy rate leaving little carry cushion post-cut
- ▼Brent at $87.26 relighting cost-push with non-food already 9.28%
The macro picture is a liquidity glut meeting a demand vacuum. M2 grew 11.11% on the Jun 2026 read — its fastest since Sep 2021 (11.2% then) — yet private credit growth has stalled at 4.98%, the money supply expanding more than twice as fast as the loan book it is meant to fund. The trailing 12-month CPI has eased to 8.66% on the Jul print, near its 8.59% window low, and the real policy rate has turned to 1.68% positive after the July cut. On paper that is room to ease; in practice the constraint is not the price of money but the absence of creditworthy demand — the same freeze now draining equity turnover. The risk to disinflation is external: non-food CPI still prints 9.28% and Brent at $87.26 has yet to feed the base. The desk reads the MPC as on hold — cutting into a demand freeze adds liquidity the system already cannot place.
Remittance
July remittance $2.86bn, up from last year's low but off the $3.76bn high.
Remittance Inflow
Remittance $2.86bn as of the Jul 2026 print — off the $3.76bn window high, up from the $2.42bn Aug 2025 low.
Up from the $2.42bn window low in Aug 2025 but below 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 the Jul print
- ◆The next reserve read past the 31 Jul $36.42bn print
- ◆Brent at $87.26 lifting the import bill against a soft inflow side
RISK
- ▼Earned dollars softening while reserves draw and Brent's $87.26 lifts the energy bill
- ▼The margin over the import bill no longer growing as exports hold $4.20bn on the Jun read
- ▼Remittance sliding from the $3.76bn high toward the $2.42bn window low
Fiscal
NBR held at Tk3.61tn while the fuel-subsidy claim grows on $87 Brent.
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 $87.
WATCH
- ◆The next monthly NBR print — the Tk3.61tn line has not refreshed
- ◆The fuel-subsidy claim as Brent holds $87.26
- ◆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 $87
- ▼A narrow tax net capping any near-term revenue lift
Iran War & Oil
Brent holds $87.26, up from its $71 low but off the $100 high.
Brent Crude
Brent $87.26 as of the 25 Aug print — down from $93.30 in late May, recovered off a $71.18 low, below the $100.38 window high.
Off the $71.18 trough set within the past three months and below late-May's $93.30 — crude sits mid-range.
Treasury: each dollar on Brent re-widens the import bill and the fuel-subsidy claim — watch whether $87 holds above $71.
WATCH
- ◆Whether Brent holds $87 or fades back toward its $71.18 window low
- ◆The FY27 fuel-subsidy provision as spot holds near $87
- ◆Non-food CPI 9.28% on the Jul print — energy cost-push not yet fully in the base
RISK
- ▼Brent near $87 stacking crude plus freight onto the import bill
- ▼Energy cost-push compounding into the next CPI print with non-food already 9.28%
- ▼A Gulf re-escalation carrying Brent back toward its $100.38 high onto the peg
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