Headlines
Audit majors arriving as investment appetite and gas supply stay the swing factors.
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)
Rates on hold; call money at 9.18% signals ample overnight liquidity.
FX Reserves
Gross reserves rose from USD 31.09bn in Nov 2025 to USD 36.42bn by the Jul 2026 print, below the 37.58bn series peak.
Up USD 5.33bn since the series opened at 31.09bn in Nov 2025, though off the recent 37.58bn high.
Treasury: the reserve rebuild supports the taka, but the 31 Jul read is a month stale — watch the next weekly update.
WATCH
- ◆Call money spread to the 9.50% repo as a liquidity tell
- ◆Next weekly reserves update after the 31 Jul print
RISK
- ▼Reserve read is 30 days old behind an easing rate front
- ▼14-day call money at 10.31% signals term-liquidity tightness
The policy corridor has held since the 30 July cut that set repo at 9.50%, and the interbank market is trading in line with it: overnight call money at 9.18% sits a notch below the policy rate, with the 7-day at the same level and the 14-day at 10.31%. That shape — cheap overnight funding, dearer term money — points to liquidity that is ample at the very short end but priced for caution a fortnight out. For a system where private credit is growing at just 4.98%, the signal is that funding is not the binding constraint on lending; risk appetite and asset quality are. Gross reserves, last published at USD 36.42bn for the 31 Jul print, frame the external side of that stance, though the read is now a month old.
Banking
Stressed loans at 32.26% on the Q1 print; capital cushion thin.
Overnight Money Market
DOMMR eased to 9.18% by the 27 Aug print from a 10.65% high; BOFR (Bangladesh Overnight Financing Rate) tracks at 9.23%, down from 10.42% at the Apr 2026 start.
Both sit at their series lows since the 15 Apr 2026 chart start, roughly 120bp of easing.
Treasury: overnight funding is cheap and easing, so the constraint on lending is capital and asset quality, not liquidity.
WATCH
- ◆Q2 2026 NPL disclosure for direction on the stressed stock
- ◆Provisioning coverage against the required-provision shortfall
RISK
- ▼CAR read is Q3 2025 — nearly a year old behind Q1 NPLs
- ▼Fresh Q2 print could show the stressed stock still building
The two figures that define the sector point the same way. Non-performing loans were 32.26% in the Q1 2026 print, and the Capital Adequacy Ratio was 1.56% on the older Q3 2025 read — a stock of bad loans that dwarfs the reported capital behind it. Both are quarterly prints carried from earlier issues, so the picture is at best five months old, and the next Q2 disclosure is where any change first shows. The live signal from the overnight market is benign: the Dhaka Overnight Money Market Rate (DOMMR) was 9.18% on the 27 Aug read, down from a 10.65% series high, so funding is cheap. Impaired balance sheets funded at easy overnight rates is the tension the desk sits around — liquidity is not the constraint, loss-absorption capacity is. The book stays defensive on bank credit exposure, with the Q2 print the next real catalyst.
FX & External
Taka holding at 122.99; external buffers firm but the trade gap persists.
External Flow Balance
Imports hit a series-high USD 7.51bn in the Jun 2026 print while exports were USD 4.20bn, widening the monthly goods gap.
Imports up from USD 4.39bn a year earlier (Jun 2025); exports up from USD 3.35bn on the same base.
Treasury: imports rising faster than exports keeps FX demand firm — watch reserves and the taka as the offset holds.
WATCH
- ◆Next weekly reserves print after the 31 Jul read
- ◆July export and trade-gap data for the H2 trajectory
RISK
- ▼Trade gap at USD 3.31bn on the Jun print pressures the current account
- ▼Export and trade reads are two months old behind a firm taka
DSE Markets
DSEX up 0.28% to 5,655.68; turnover thin, breadth positive at 185/144.
DSEX Index
DSEX at 5,655.68 on the 27 Aug print, up just 1.1% over twelve months from 5,594, having ranged between 4,703 and 5,926.
A full year of net-flat trading — the index is 4.6% below the 5,926 series high.
Equity risk: no trend and thin turnover mean little momentum for bank-heavy indices; expect range-trading until turnover picks up.
WATCH
- ◆Turnover sustaining above Tk 500cr as a conviction tell
- ◆DSEX holding the 5,600 area against the 5,926 12-month high
RISK
- ▼Thin turnover leaves the index exposed to sharp reversals
- ▼Range-bound tape near 5,655 with no clear catalyst
T-Bonds & T-Bills
Bill yields easing — 91d at 8.83%; the curve is nearly flat.
BD Govt Yield Ladder
In the monthly series, bill yields rose Jun to Jul 2026 — the 364-day to 10.09% — while the 2-year and 5-year eased toward 9.7-9.8%.
A two-point series (Jun-Jul 2026): the front repriced up as the belly came in, flattening the curve.
ALM (Asset-Liability Management): a flatter curve trims the carry from extending duration; treasury gains little moving out the tenor.
WATCH
- ◆Next weekly 5y/10y bond update after the 21 Aug read
- ◆T-bill cut-offs at the next auction for continued easing
RISK
- ▼Flat curve leaves little term premium for duration extension
- ▼Bond reads are 9 days old against moving bill cut-offs
Macro & Inflation
CPI 12m avg 8.66% on the July print; real policy rate positive.
CPI Trend
The 12-month average CPI eased to 8.66% by the Jul 2026 print from 9.77% a year earlier, off a 10.34% series peak.
Near the 8.59% low of the past two years, well below the 10.34% peak in the series.
Treasury: with the 12-month average easing and real rates positive, expect the MPC to hold at the next MPS rather than cut.
WATCH
- ◆August CPI print for whether the 12-month average keeps easing
- ◆M2 at 11.11% against private credit at 4.98% — where the money is going
RISK
- ▼REER (Real Effective Exchange Rate) at 102.78 on the Mar print signals the taka may be dear
- ▼Sticky non-food inflation at 9.28% keeping headline elevated
Bangladesh's monetary picture is unusual for this point in the cycle. The 12-month average CPI eased to 8.66% on the Jul 2026 print, and with the repo held at 9.50% the real policy rate has turned positive at 1.18% — the first clearly restrictive setting in this tightening cycle. Yet broad money is accelerating: M2 grew 11.11% for Jun 2026, the highest since Sep 2021 (11.2% then), even as private credit growth languished at 4.98%. The gap says the expansion in money is flowing to the government and the banking system's own balance sheets rather than to private borrowers. On the external side, the REER stood at 102.78 in the Mar 2026 print, the highest since Nov 2025 (103.55 then), leaving the taka modestly dear in real terms even as the nominal rate holds near 123. For the desk, positive real rates plus soft private credit argue for the MPC to hold at the next MPS rather than cut.
Remittance
July remittance $2.86bn, up 18% on the year — a firm external support.
Remittance Inflow
Monthly remittance was USD 2.86bn at the Jul 2026 print, up from USD 2.42bn a year earlier, though below the USD 3.76bn series peak.
A firm year: up 18% on Aug 2025, though off the USD 3.76bn festival-season high.
External support: remittance at this run-rate offsets much of the trade gap and underpins the taka; watch the August print.
WATCH
- ◆August remittance for whether the $2.8bn-plus run-rate holds
- ◆Formal-channel share as the informal spread narrows
RISK
- ▼A pullback in remittance would expose the trade gap and reserves
- ▼Seasonal dip after the peak festival months
Fiscal
NBR at Tk 3.61tn; government bank borrowing Tk 0.94tn on the June print.
NBR Tax Revenue
Monthly NBR revenue was BDT 28,027 crore in the Oct 2025 print, up from BDT 26,555 crore a year earlier, against a BDT 52,720 crore series peak.
Up 5.5% year on year (Oct 2025 vs Oct 2024), but far below the BDT 52,720 crore monthly high.
Fiscal: revenue growth near 5% lags the deficit's funding needs, keeping government reliant on bank borrowing and T-bill issuance.
WATCH
- ◆FY27 revenue run-rate against the annual NBR target
- ◆July-August borrowing update for fresh government funding demand
RISK
- ▼Government bank borrowing crowding out private credit already at 4.98%
- ▼Revenue shortfall widening the financing gap filled by bank borrowing
Iran War & Oil
Brent at $89.31, WTI $83.40; oil steady with no fresh war premium.
Brent Crude
Brent was $89.31 at the 28 Aug print, down from $93.01 when the chart opened on 1 Jun 2026, having ranged $71-$100.
Off the $100.38 window high and well above the $71.18 low — mid-range through the summer.
Import bill: crude in the high-$80s keeps fuel and LNG costs firm but adds no new pressure to the trade gap.
WATCH
- ◆Brent holding the high-$80s versus the $100 series high
- ◆Any escalation premium feeding LNG and fuel import costs
RISK
- ▼A break toward $100 would widen the import bill and trade gap
- ▼Oil-linked passthrough to non-food CPI already at 9.28%
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