Headlines
A week of small-business credit launches and external loans against a persistent energy squeeze.
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 rate corridor is unchanged and short-term liquidity stayed comfortable this week.
FX Reserves
Gross reserves rose to $36.42bn in the 31 Jul print from $31.09bn in Nov 2025, off a $37.58bn peak in the series.
Latest plotted point is the 31 Jul 2026 print; reserves sit below their $37.58bn cycle high.
Treasury: net reserves at $31.60bn and the cover math rest on a five-week-old read; watch the next weekly BB print.
WATCH
- ◆The next weekly BB gross-reserves update against the 31 Jul $36.42bn read
- ◆Overnight call money for any drift off 9.2%
- ◆Any move in the 7.5%/11.0% corridor
RISK
- ▼A stale reserve print masking a softer external line
- ▼A liquidity squeeze lifting call money toward the 11.0% SLF ceiling
Bangladesh Bank held the corridor at 9.5% repo, 7.5% SDF and 11.0% SLF through the week, and overnight call money settled at 9.2% on 3 September — near enough to the repo to show banks are funding comfortably, not scrambling. That comfort is the channel pulling the bill and bond curve lower, with the 364d cut-off down to 8.89% on the 31 August auction. The external side is the caveat: gross reserves were last published at $36.42bn for 31 July and net reserves at $31.60bn, both about five weeks old. Treat the easing as intact into next week, but keep the reserve refresh on the desk calendar — a soft external print is the single input that could lift the corridor floor and stall the rally.
Banking
Non-performing loans remain near a third of the book while funding rates ease.
Overnight Money Market
DOMMR (Dhaka Overnight Money Market Rate) eased to 9.23% and BOFR to 9.26% by 3 Sep, from 10.09% and 10.42% in mid-April.
By the 3 Sep session both sit near their April-to-September lows, with DOMMR troughing at 9.18%.
Treasury: funding cost has fully absorbed the 30 Jul repo cut; net interest margin compresses as asset yields follow the bill curve down.
WATCH
- ◆The Q2 2026 NPL print when Bangladesh Bank releases it
- ◆Whether overnight rates hold above the 9.18% DOMMR trough
- ◆Provisioning capacity against the 32.26% stock
RISK
- ▼A capital ratio near 1.56% leaving no cushion for fresh provisioning
- ▼Net interest margin compression as asset yields chase the falling bill curve
- ▼Restructured loans rolling back into the NPL stock
Banking's headline figures are stale but structural: non-performing loans stood at 32.26% in the Q1 2026 print and the Capital Adequacy Ratio (CAR) at 1.56% for Q3 2025 — a position that leaves little room to absorb fresh provisioning. Neither moved this week, so the σ-move is zero and the risk is persistence, not deterioration. The live signal is funding: the Bangladesh Overnight Financing Rate (BOFR) fell to 9.26% and DOMMR to 9.23% by 3 September, both near the low of their range since April, confirming the 30 July repo cut has passed into money markets. That shifts the pressure point for the desk — liquidity is cheap, but as the bill curve slides toward 8.7% the asset side reprices faster than the deposit book, and net interest margin narrows into the fourth quarter.
FX & External
USD/BDT was steady near 122.80 this week; external prints remain weeks old.
External Flow Balance
Imports climbed to $7.51bn in the Jun 2026 print, a series high, up from $4.39bn a year earlier; exports were $4.20bn.
Latest plotted month is Jun 2026; imports at their highest across the 24-month series.
Treasury: the goods gap is widening as imports outrun exports, so reserve cover leans on remittance holding above $2.8bn.
WATCH
- ◆The next weekly reserve print against the $36.42bn read
- ◆July export and trade data
- ◆USD/BDT for any drift off 122.80
RISK
- ▼A record import bill outrunning export and remittance inflows
- ▼Reserve staleness masking a weaker July external balance
- ▼Gold at $4,522/oz signalling global risk-off pressure on the taka
DSE Markets
DSEX ended the week at 5,662, little changed, with decliners outnumbering advancers.
DSEX Index
DSEX closed at 5,662 in the 3 Sep session, up under 1% over the past year from 5,614 and off its 5,926 high.
The 3 Sep close sits mid-range for the year, well above the 4,703 low touched earlier.
Equity desks: a flat year and thin Tk721cr turnover point to range-trading; breadth was weak, 226 decliners to 127 advancers.
WATCH
- ◆Turnover recovering above Tk1,000cr as a participation signal
- ◆Whether DSEX holds the 5,640 floor tested this week
- ◆Breadth turning positive
RISK
- ▼Thin turnover leaving the index exposed to single-stock swings
- ▼Negative breadth deepening into a broader drift lower
T-Bonds & T-Bills
T-bill cut-offs fell again at the 31 August auction across all three tenors.
BD Govt Yield Ladder
Across the Jul–Sep ladder the curve fell: 91d bill 9.79% to 8.73%, 364d 10.09% to 8.89%, 10y 10.24% to 9.23%.
Latest ladder point is the 1 Sep read; every tenor now below 9.4%, down from above 10% in July.
Treasury: the sovereign refinances 100bp+ cheaper than in July; expect bank bond books to show mark-to-market gains this quarter.
WATCH
- ◆The next T-bill auction for whether the slide continues
- ◆The August CPI release as the disinflation anchor
- ◆Whether the 10y holds below 9.25%
RISK
- ▼A curve this low compressing bank reinvestment yields and net interest margin
- ▼Yields reflecting weak credit demand rather than durable disinflation
- ▼An inflation or reserve surprise forcing a curve snap-back
The 31 August auction extended a three-month rally: the 364d cut-off fell 18bp to 8.89% and the 91d 10bp to 8.73%. On the monthly ladder the move is larger — the 364d is down from 10.09% in July and the 10y from 10.24% to 9.23%, more than 100bp of repricing across the curve. Two forces drive it. Disinflation has pulled the real anchor down, and Bangladesh Bank's 30 July repo cut to 9.5% has fed into money markets, with DOMMR at 9.23%. The quieter driver is demand: private credit growth of just 4.98% leaves banks flush with deposits and short of borrowers, bidding hard for government paper. For the desk that means mark-to-market gains on the bond book now, but a reinvestment problem building. The next auction sets whether 8.7% is a floor or a waypoint — hold duration into the print, but size for a curve with little room to fall.
Macro & Inflation
Inflation kept easing to 8.66% in July while M2 growth hit 11.11%.
CPI Trend
The 12-month average CPI eased to 8.66% in Jul 2026 from 9.77% a year earlier; food point-to-point ran 8.60% and non-food 9.61% in June.
The 8.66% Jul reading is near the series low of 8.59%, down from a 10.34% peak.
Treasury: the real policy rate is positive at 1.18%, giving the MPC room to hold; watch the August CPI release next week.
WATCH
- ◆The August CPI release, due next week
- ◆REER for further real-terms taka appreciation past 102.78
- ◆Whether private credit growth turns up from 4.98%
RISK
- ▼M2 at a four-year high seeding future inflation while credit stays weak
- ▼An elevated REER pressuring export competitiveness
- ▼Non-food CPI stuck above 9% keeping headline sticky
Remittance
August remittances printed $2.82bn on the flash, up 16% on last August.
Remittance Inflow
Monthly remittance last printed $2.86bn for Jul 2026, up from $2.42bn a year earlier, off a $3.76bn high in the window.
Latest plotted month is Jul 2026 at $2.86bn; the August flash of $2.82bn is provisional.
Treasury: remittance above $2.8bn is the main offset to the record import bill; watch the August final against the $2.82bn flash.
WATCH
- ◆The final August remittance number against the $2.82bn flash
- ◆Whether the UK inflow surge holds as US and Canada soften
- ◆September flows into the reserve line
RISK
- ▼A provisional flash revised lower on confirmation
- ▼US and Canada corridors continuing to fall
- ▼Remittance alone unable to offset the widening goods gap
Fiscal
NBR collections and bank borrowing were unchanged as new external loans were signed.
NBR Tax Revenue
Monthly NBR tax revenue was Tk28,027cr in the Oct 2025 print, up from Tk26,555cr a year earlier but far below the Tk52,720cr peak.
Latest plotted month is Oct 2025; the revenue series runs nearly a year behind the calendar.
Fiscal: with monthly collection near Tk28,000cr, the YTD Tk3.61tn leans on non-tax and external financing like the new $1.0bn Islamic Development Bank loan.
WATCH
- ◆The next monthly NBR revenue release against the Tk28,000cr run-rate
- ◆Drawdown terms on the new external facilities
- ◆July government bank-borrowing data
RISK
- ▼A revenue shortfall widening the domestic borrowing need
- ▼External loans arriving slower than the deficit accrues
Iran War & Oil
Brent stayed elevated near $95.69, keeping the energy import bill under pressure.
Brent Crude
Brent ended at $95.69 in the 3 Sep read, up from $92.87 in early June, after ranging $71.18 to $100.38 over the summer.
The 3 Sep close sits near the upper end of the $71–$100 band held since June.
Credit: Brent near $96 keeps the energy import bill and fuel-subsidy math elevated; watch 60–90 DPD (Days Past Due) on the next refinancing.
WATCH
- ◆Brent holding above or breaking below $90 next week
- ◆Any move to open the state fuel-import market
- ◆Pass-through to domestic fuel and power tariffs
RISK
- ▼Sustained mid-$90s crude widening the import bill
- ▼An oil spike straining energy-importer credit lines
- ▼Fuel-subsidy drag on the fiscal balance
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