Headlines
Loan-recovery cases and thin DSE turnover set a cautious tone this week.
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 policy corridor held all week as call money settled near the repo.
FX Reserves
Gross reserves stood at $36.42bn in the 31 Jul 2026 print, up from $31.09bn to open the window and shy of the $37.58bn window high.
Window opens 30 Nov 2025 at $31.09bn; the latest plotted point is the 31 Jul 2026 print.
Treasury: buffer rebuilt, but import cover behind an easing front rests on a four-week-old read; watch the August reserve refresh.
WATCH
- ◆Next MPS for any signal on the 9.50% repo
- ◆August gross-reserve refresh from BB
- ◆14-day call money at 10.31% for term-premium drift
RISK
- ▼Reserve buffer resting on a four-week-old print
- ▼Term liquidity tightening if deposits migrate to T-bills
Banking
Banks pressed loan recovery while NPL and capital strains stayed in place.
WATCH
- ◆Q2 2026 NPL print for direction on the recovery drive
- ◆Dutch-Bangla's Tk3,500cr capital move and dividend eligibility
- ◆Uptake of the Tk410b bank stimulus fund
RISK
- ▼Recovery cases slow to convert to cash
- ▼Capital thin at weaker banks against a 32.26% NPL stock
- ▼Provisioning drag on FY27 earnings
The week's banking news was all about the response to a problem the numbers have already set. State-owned Sammilito Bank filed 10,000 cases to recover default loans, the clearest sign yet that recovery is shifting from provisioning to litigation. Against that, the stock is unmoved: the NPL ratio was 32.26% in the Q1 2026 print and CAR 1.56% in the Q3 2025 print, both now months old. Cash-rich banks agreeing to place Tk410b in a stimulus fund shows liquidity is not the constraint — capital and asset quality are. For the desk, the read into next week is that counterparty lines to weaker banks should be sized to the soured-loan stock, not the recovery headlines, until a fresher NPL print lands.
FX & External
The taka held near 123 all week as gold stayed elevated.
External Flow Balance
Imports hit a series-high $7.51bn in Jun 2026 versus $4.39bn a year earlier; exports rose to $4.20bn from $3.35bn — the gap is widening.
Latest trade points are Jun 2026; imports sit at the window peak ($7.51bn), exports below the $4.78bn high.
Risk: the import bill is outrunning export receipts and pressuring the current account; watch July trade data into Q4.
WATCH
- ◆July trade and remittance data for the external balance
- ◆August gross-reserve refresh from BB
- ◆Gold above $4,670/oz as a global-risk signal
RISK
- ▼Import bill widening the current-account gap
- ▼Reserve buffer on a four-week-old print
- ▼Imported inflation if the taka slips
DSE Markets
Equity turnover fell to a five-month low even as DSEX steadied late.
DSEX Index
DSEX closed at 5,655.68 on 27 Aug 2026, up 2.5% from 5,517.95 a year earlier but below the 5,926.28 window high.
One-year window ranged 4,702.69 to 5,926.28; the latest close is the 27 Aug 2026 point.
Equity desks: index below its window high with turnover thinning; watch a turnover recovery next week for conviction.
WATCH
- ◆Turnover recovery above Tk500cr next week
- ◆Whether DSEX holds the late-week bid
- ◆Asset-tender and rooftop-solar flow into listed names
RISK
- ▼Turnover staying thin and widening spreads
- ▼Sentiment softening if rates and NPLs dominate
- ▼Low-liquidity gaps on block trades
The equity story this week was liquidity, not level. DSEX closed at 5,655.68 on 27 Aug and even managed a 0.28% gain into the week's end, but the number that matters is turnover: Tk467cr, the first close below Tk500cr in five months. A market can hold its index and still lose its float, and that is what the tape showed — breadth stayed positive at 185 advancers to 144 decliners, so the drift is about participation, not a broad sell-off. For the desk, thin turnover raises execution risk on any size and makes the index level less informative than it looks. The read into next week is to treat DSE as a low-conviction tape: size to the liquidity, not the close, and watch for turnover to reclaim Tk500cr before calling the late-week bid a floor.
T-Bonds & T-Bills
T-bill cutoffs fell 10 to 22bp at the 24 Aug auction.
BD Govt Yield Ladder
The 5-year yield eased to 9.79% in the Jul 2026 print from 10.35% in June, and the 2-year to 9.71% from 10.43% — the belly richened.
The monthly series runs Jun–Jul 2026 only; the latest plotted read is the Jul 2026 print.
Treasury: a richening belly compresses reinvestment yields; expect ALCO to extend duration if the front confirms at the next tender.
WATCH
- ◆Next T-bill auction for confirmation of the cutoff fall
- ◆Whether call money follows the front lower
- ◆Long-end demand at the next 10y/15y window
RISK
- ▼Reinvestment yields compressing bank treasury income
- ▼A reversal if inflation or borrowing surprises higher
- ▼Curve steepening if the long end lags the front
This was the week the sovereign curve stopped drifting and started to rally. At Monday's auction the 91-day T-bill cleared at 8.829%, about 20bp below the prior tender; the 182-day fell some 22bp to 8.92% and the 364-day 10bp to 9.07%. The belly had already moved, with the 10-year at 9.234% against 10.25% earlier. Read together, that is a market pricing easier funding, not a single soft auction — front and belly moved the same way. The mechanism matters: as cutoffs fall, the reinvestment yield on maturing bills drops with them, so a treasury rolling short paper into the next tender locks in less. The position that follows is to extend duration before the move is confirmed, and to watch whether overnight call money — still 9.18%, near the repo — follows the bills lower. If it does, the easing is systemic; if not, this is a demand-driven rally in govt paper to fade at the long end.
Macro & Inflation
Inflation ground lower and the real policy rate stayed positive this week.
CPI Trend
The 12-month average CPI eased to 8.66% in the Jul 2026 print from 9.95% two years earlier, holding just above the 8.59% series low.
Latest 12m point is Jul 2026 (8.66%); food p2p eased to 8.60% by Jun 2026 from 11.36% two years earlier.
Credit/ALCO: 12m inflation grinding toward its series low supports a hold at the next MPS; watch the August CPI print.
WATCH
- ◆August CPI print for the disinflation trend
- ◆Next MPS given a positive real rate
- ◆M2 at a multi-year high for second-round pressure
RISK
- ▼Sticky non-food CPI at 9.28% stalling disinflation
- ▼Money growth outrunning credit demand
- ▼REER (Real Effective Exchange Rate) at 102.78 eroding export competitiveness
Remittance
Remittance held near $2.9bn in the latest print, up 18% on the year.
Remittance Inflow
Remittance was $2,858.68mn in the Jul 2026 print, up 18% from $2,421.9mn a year earlier, though below the $3,755.1mn window high.
The twelve-month window opens Aug 2025 at $2,421.9mn; the latest plotted point is the Jul 2026 print.
FX/treasury: inflows near $2.9bn a month underpin the taka near 123 and the reserve rebuild; watch the August remittance print.
WATCH
- ◆August remittance print for post-Eid normalisation
- ◆Whether inflows hold above $2.8bn
- ◆Channel mix and any incentive changes
RISK
- ▼Seasonal fade after the peak months
- ▼Informal-channel leakage if the spread widens
- ▼Slowdown in Gulf labour markets
Fiscal
Revenue held flat as the state floated idle-asset sales this week.
NBR Tax Revenue
Monthly NBR tax revenue was Tk28,027cr in the Oct 2025 print, up 5.5% from Tk26,555cr a year earlier, well below the Tk52,720cr series peak.
Latest plotted point is Oct 2025 (Tk28,027cr); the series runs from Jul 2023 (Tk22,005cr).
Fiscal: revenue running only mid-single-digits ahead YoY keeps the deficit reliant on bank borrowing; watch the FY27 ramp.
WATCH
- ◆October idle-asset tender for non-tax revenue
- ◆FY27 NBR monthly collection ramp
- ◆ADP execution pace after the Khosru remarks
RISK
- ▼Revenue shortfall deepening bank-borrowing reliance
- ▼Slow ADP dragging growth and receipts
- ▼Crowding-out of private credit
Iran War & Oil
Brent stayed in the high-$80s all week, a benign cost backdrop.
Brent Crude
Brent settled at $88.75 in the 27 Aug 2026 point, down from $91.70 at the 30 May window open and off a $100.38 high.
The three-month window (30 May–27 Aug 2026) ranged $71.18 to $100.38; the latest plotted point is 27 Aug.
Energy-importer credit: Brent in the high-$80s eases the import-bill pressure a $100 print would revive; watch OPEC+ supply headlines.
WATCH
- ◆OPEC+ supply signals into next week
- ◆Any Middle East escalation headlines
- ◆Whether Brent tests the $90 area
RISK
- ▼Supply shock lifting the import bill
- ▼Fuel-subsidy pressure if crude breaks higher
- ▼Freight and insurance costs on regional tension
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