Headlines
Stabilisation story firms; liquidity strains surface at bank and bourse level.
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)
Corridor steady; term interbank funding prices above the standing ceiling.
FX Reserves
Gross reserves climbed from $31.09bn in Nov 2025 to $36.42bn by the Jul 2026 print, off a $37.58bn peak in the series.
Net reserves reached $31.60bn on the Jul 2026 print, up from $26.40bn in Nov 2025.
Treasury: the reserve build supports the FX runway, but the Jul print lags today's corridor read by seven weeks — monitor the next refresh.
WATCH
- ◆14-day call money holding above the 11.0% SLF ceiling
- ◆next weekly reserves refresh against the 1 Jul $36.42bn print
RISK
- ▼Term liquidity squeeze lifting deposit costs into Q4
- ▼Reserve print seven weeks old ahead of import-heavy season
Banking
Distress entrenched; asset quality and capital await fresh quarterly disclosure.
WATCH
- ◆Q2 2026 NPL disclosure against the 32.26% Q1 base
- ◆any recapitalisation move for the state-owned banks
RISK
- ▼Capital at 1.56% offering no cushion for further provisioning
- ▼NPL stock concentrated in a handful of SOCB balance sheets
The two prints tell a consistent story of loss the system has not yet absorbed. NPLs at 32.26% on the Q1 2026 read put roughly a third of the loan book in the non-performing column, and with CAR last reported at 1.56% for Q3 2025 the aggregate capital base is too thin to provision that stock without fresh injection. The distress is not evenly spread — the state-owned commercial banks hold the bulk of it, concentrating the tail risk in a few balance sheets while stronger private banks carry the funding and reputational spillover. For the desk, that argues for defensive counterparty lines on names with SOCB exposure, tighter interbank placement limits to the weakest banks, and close reading of the next quarterly disclosure for whether the provisioning gap is closing or being deferred.
FX & External
Peg holds near 122.77; external prints run several weeks stale.
External Flow Balance
Imports hit a series high of $7.51bn in the Jun 2026 print against exports of $4.20bn, the widest goods gap in the run.
Exports have ranged $3.03bn–$4.78bn since Aug 2024; the Jun 2026 read sits mid-range at $4.20bn.
Treasury: import bill at a series peak keeps the trade gap wide; the external account depends on remittance and reserves to fund it.
WATCH
- ◆USD/BDT 122.77 stability as the goods deficit persists
- ◆next weekly reserves refresh beyond the 31 Jul $36.42bn print
RISK
- ▼Goods deficit outrunning remittance if inflows soften into H2
- ▼Reserve read four weeks old ahead of import-heavy season
DSE Markets
Index eases and turnover thins; liquidity is the binding constraint.
DSEX Index
DSEX at 5,640.09 on the 25 Aug print, up from 5,443.31 a year earlier but well below the 5,926 series high.
The index has swung from a 4,702.69 low to a 5,926.28 high over the past year.
Equity desk: with the index near the middle of its 12-month range and turnover thin, watch for a liquidity-driven break rather than a fundamental one.
WATCH
- ◆Turnover recovering above Tk 507cr as a liquidity signal
- ◆DSEX holding the 5,640 level on 25 Aug data
RISK
- ▼Thin turnover amplifying price moves on low volume
- ▼Liquidity drought deepening if margin funding stays tight
T-Bonds & T-Bills
Yields easing across the curve; funding cheaper as auction cut-offs slip.
BD Govt Yield Ladder
On monthly data, the 364-day T-bill yield rose from 9.74% in Jun to 10.09% by the Jul 2026 print, the 2-year easing to 9.71%.
These monthly series span only Jun–Jul 2026; the 10-year held flat at 10.24% across both prints.
Treasury: the Jul monthly print predates the Aug auction easing; the fresher 24 Aug cut-offs below 9.1% are the better guide to current funding cost.
WATCH
- ◆Next T-bill auction extending the sub-9% short-end trend
- ◆10-year holding near 9.23% on the 21 Aug read
RISK
- ▼Falling cut-offs reflecting soft private credit demand at 4.98%
- ▼Duration repricing if inflation prints reverse the easing
The short end has moved decisively. T-bill cut-offs fell across all three tenors at the 24 Aug auction — 91-day to 8.83%, 182-day to 8.92%, 364-day to 9.07% — extending a slide of roughly 36bp on the 91-day over recent rounds, while the 10-year settled near 9.23% on the 21 Aug read against a summer level above 10.2%. The curve now slopes cleanly upward from bills to bonds, which typically signals the market expects policy to hold rather than tighten. The ambiguity sits underneath: private credit growth is only 4.98%, so part of this rally is thin loan demand pushing banks into government paper rather than a confident easing call. For the desk, that argues for locking duration selectively on the belly while cut-offs fall, but treating the move as partly demand-driven — a reversal in the inflation path would reprice the long end quickly.
Macro & Inflation
Disinflation slow; private credit soft as M2 growth quietly accelerates.
CPI Trend
The 12-month average CPI eased to 8.66% by the Jul 2026 print, down from 9.95% in Aug 2024 and near the 8.59% series low.
Even as CPI eased, M2 growth reached 11.11% on the Jun print — highest since Sep 2021 (11.2% then).
ALCO: real policy rate positive at 1.68% supports a hold, but accelerating M2 against soft credit warns of liquidity building outside productive lending.
WATCH
- ◆Aug CPI print for a break below the 8.59% series low
- ◆private credit lifting off the 4.98% base
RISK
- ▼REER (Real Effective Exchange Rate) above the base on the Mar 2026 print, weighing on export competitiveness
- ▼M2 growth at 11.11% outrunning private credit at 4.98%, liquidity not reaching productive lending
Remittance
July inflows steady near $2.86bn — the external account's reliable leg.
Remittance Inflow
Remittance rose from $2.42bn in Aug 2025 to $2.86bn by the Jul 2026 print, having peaked at $3.76bn during the year.
The Aug 2025 reading of $2.42bn marks the series floor, unbroken through the Jul 2026 print.
Treasury: dependable inflows above $2.4bn underwrite the reserve build and the 122.77 peg; watch the August print for any channel-driven softening.
WATCH
- ◆August remittance holding above the $2.8bn run into H1 FY27
- ◆the formal-channel premium against the peg at 122.77
RISK
- ▼Inflow softening if the formal-channel premium narrows against the peg
- ▼Reliance on transfers to offset the $3.31bn June goods deficit
Remittance is the load-bearing wall of the external account, and the July 2026 print of $2.86bn shows it holding firm. That matters because the goods trade is structurally in deficit — exports of $4.20bn on the June read against imports at a series high left a $3.31bn gap — so the current account leans on transfers to close it and keep reserves, last at $36.42bn on the 31 Jul print, from drawing down. The taka has held at USD/BDT 122.77 because this inflow is dependable; a managed peg is only as stable as the foreign currency behind it. The risk is not this month's figure but the channel: transfers flow formally when the official rate is competitive and leak to informal routes when it is not. While that spread stays narrow, the reserve build holds and the desk can treat the peg as anchored.
Fiscal
Fiscal data quiet; revenue and bank borrowing both pending refresh.
NBR Tax Revenue
Monthly NBR revenue was Tk28,027cr in the Oct 2025 print, up from Tk22,005cr in Jul 2023, against a series peak of Tk52,720cr.
The chart runs Jul 2023 to Oct 2025; monthly collection has ranged Tk21,478cr to Tk52,720cr over that span.
Fiscal: the plotted series ends Oct 2025, so it lags today's YTD figure; the wide monthly swings reflect end-of-quarter collection spikes.
WATCH
- ◆First FY27 monthly NBR collection print against the BDT 3.61tn base
- ◆Government bank borrowing beyond the Jun BDT 0.94tn read
RISK
- ▼Deficit financing crowding out private credit already at 4.98%
- ▼Revenue shortfall widening the bank-borrowing requirement into FY27
Iran War & Oil
Crude softer near $86.62; a modest tailwind for the import bill.
Brent Crude
Brent slipped from $92.41 at end-May to $86.62 by the 26 Aug print, having ranged between $71.18 and $100.38 over the period.
The series opened at $92.41 on 29 May 2026; the current $86.62 sits in the lower half of that range.
Treasury: watch $90 as the pivot — sustained levels below it ease the import bill and support the disinflation already visible in food CPI.
WATCH
- ◆Brent holding below $90 through the autumn refi cycle
- ◆any Iran-related supply shock reversing the drift lower
RISK
- ▼Crude rebound toward the $100 series high lifting the import bill
- ▼Fuel costs feeding back into non-food CPI already at 9.28%
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