Headlines
Energy stress and export resilience share the front page today.
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; the corridor is doing its job at 9.50%.
FX Reserves
Gross reserves rose from $31.09bn (Nov 2025) to $36.42bn as of the Jul 2026 print, off a $37.58bn peak within the window.
The rebuild spans Nov 2025 to the Jul 2026 print; net reserves rose $26.40bn to $31.60bn alongside.
Treasury: the rebuild supports the peg, but the number is seven weeks old — watch the next monthly print before sizing FX cover.
WATCH
- ◆Call money drifting toward the 11.00% SLF ceiling as month-end liquidity tightens
- ◆The next reserves print confirming the rebuild past the Jul 2026 $36.42bn read
RISK
- ▼A reserves refresh that undercuts the Jul 2026 $36.42bn level
- ▼Call money spiking above the corridor on a liquidity squeeze
Banking
Systemic NPLs near a third of loans; capital data lags a year.
Overnight Money Market
Interbank rates eased through the window — DOMMR fell from 10.09% (mid-Apr) to 9.23% by the 3 Sep print, BOFR from 10.42% to 9.26%.
Both rates now sit near their window lows (DOMMR floor 9.18%), a five-month easing off the April highs.
Treasury: overnight funding is cheap despite the NPL overhang; the easing reflects excess liquidity, not credit comfort — watch for divergence at weak banks.
WATCH
- ◆A Q2 2026 CAR disclosure to replace the year-old Q3 2025 read
- ◆SCB provisioning shortfall as NPLs stay near 33%
RISK
- ▼A CAR refresh confirming capital erosion against the 32.78% NPL stock
- ▼Interbank funding stress if weaker banks lose access
The headline tells one story and the plumbing another. NPLs held at 32.78% in the Q2 2026 print, a level that in most systems would signal seizure, yet the interbank market is easing: the Dhaka Overnight Money Market Rate (DOMMR) fell to 9.23% by 3 Sep from 10.09% in mid-April, and the Bangladesh Overnight Financing Rate (BOFR) tracked it down to 9.26% from 10.42%. That gap is the point — liquidity is ample at the healthy end of the system while the bad-loan stock sits on a handful of SCB balance sheets. The capital read that should tell you who can absorb it is the Q3 2025 CAR at 1.56%, nearly a year stale. Until a fresh CAR lands, the desk should treat SCB counterparty lines as the weak link and price the funding advantage of well-capitalised private banks accordingly.
FX & External
Peg holding at 122.80; external accounts firmer but the prints lag.
External Flow Balance
Exports rose to $4.20bn (Jun 2026) from $3.35bn a year earlier, but imports ran hotter at $7.51bn, a window high — the gap persists.
Imports at their window high ($7.51bn, Jun 2026) versus a $4.39bn low a year earlier — import demand has climbed sharply.
Treasury: the trade gap stays wide on import strength; reserve cover holds only because remittance and exports are both rising — watch the import trend.
WATCH
- ◆The Aug/Sep export print confirming the run above $4bn
- ◆A reserve refresh past the Jul 2026 $36.42bn read
RISK
- ▼Trade gap widening if imports outrun the $4.20bn export pace
- ▼Gold at $4,429/oz signalling global risk-off that lifts import costs
The external accounts are quietly rebuilding. Gross reserves reached $36.42bn in the Jul 2026 print, up from $31.09bn last November, and net reserves rose to $31.60bn from $26.40bn over the same span. Exports ran at $4.20bn in June, a quarter above the $3.35bn of a year earlier, and the taka has sat still at USD/BDT 122.80. The one caution is timing: the export and trade-gap reads are from June, the reserve number from July, so the picture the desk is pricing is two to three months old against a spot rate quoted today. With remittance flash pointing higher into August, the funding side of the current account looks solid — the desk can hold FX cover assumptions at current levels but should refresh the moment the Aug export and reserve prints land.
DSE Markets
Index flat at 5,662; decliners outnumber advancers, turnover stays thin.
DSEX Index
DSEX ended at 5,662.09 as of the 3 Sep print, barely changed from 5,636.15 a year ago — a flat 12 months after a swing to 4,702 and back.
Over the year the index ranged 4,702.69 to 5,926.28; it now sits mid-range, near where it started.
Equity desk: a full year of net-flat returns with a wide swing — index risk is range-bound, not trending; position for range, not breakout.
WATCH
- ◆Turnover recovery above Tk 1,000cr as a conviction signal
- ◆Whether DSEX holds the 5,600 level into month-end
RISK
- ▼Negative breadth persisting into a broader index drift lower
- ▼Thin liquidity amplifying moves on any large-cap news
T-Bonds & T-Bills
Short-end yields drifting lower; the curve keeps flattening from July highs.
BD Govt Yield Ladder
Yields fell sharply across the monthly series — the 364-day from 10.09% (Jul) to 8.89% as of the Sep print, the 10-year from 10.24% to 9.23%.
A broad three-month rally: every plotted tenor from 91-day to 20-year now sits at its window low.
Treasury: falling cut-offs cut the government's funding cost and lift bond prices — duration has paid; expect demand to stay firm if liquidity holds.
WATCH
- ◆The next auction confirming cut-offs holding below 9%
- ◆A 10-year bond refresh past the 21 Aug 9.23% read
RISK
- ▼A yield reversal if government borrowing accelerates into H2
- ▼Curve steepening if the long end lags the short-end rally
Macro & Inflation
Disinflation grinding on; credit weak, money growth highest since 2021.
CPI Trend
The 12-month average CPI eased to 8.66% as of the Jul 2026 print, down from 9.95% at the series start and near its 8.59% window low.
Food p-to-p fell to 8.60% by the Jun 2026 print from 11.36% two years earlier; non-food barely moved at 9.61%.
ALCO: with the 12-month average near 8.6% and non-food sticky, real rates stay barely positive — expect BB to hold the corridor at the next MPS.
WATCH
- ◆The Aug CPI print confirming disinflation past the 8.66% 12-month average
- ◆Private credit growth recovering from the 4.98% August pace
RISK
- ▼M2 at 11.11%, the highest since Sep 2021 (11.2% then), feeding back into prices
- ▼REER (Real Effective Exchange Rate) at 102.78 on the Mar 2026 print signalling a dear taka on exports
Remittance
Inflows holding above $2.8bn; the external funding cushion stays intact.
Remittance Inflow
Remittance rose to $2,858.68mn as of the Jul 2026 print, up from $2,421.9mn a year earlier, with a $3,755.1mn peak in the plotted window.
The 12-month low was $2,421.9mn (Aug 2025); inflows have held above $2.4bn every month since.
FX: a rising remittance base funds the trade gap and the reserve rebuild — treasury can hold cover assumptions while inflows stay above $2.8bn.
WATCH
- ◆Whether the Aug $2.82bn flash is revised up on final data
- ◆The festival-season pull into the next month's inflows
RISK
- ▼A drop back toward the $2.42bn year-ago pace narrowing reserve cover
- ▼Informal-channel leakage if the spread to kerb rates widens
Remittance is the quiet engine behind the external accounts. The Aug 2026 flash came in at $2.82bn, up roughly 16% from $2.42bn a year earlier, and the monthly series has ranged from $2.42bn to a $3.76bn peak over the past year. That flow matters more than usual now: exports were $4.20bn in the June print against imports of $7.51bn, a trade gap above $3bn a month, and remittance closes most of that gap and lets reserves keep climbing — gross reserves reached $36.42bn in the Jul 2026 print, up from $31.09bn last November. So FX cover is being underwritten by current-account funding, not capital inflows: the durability of the peg tracks the durability of worker inflows. The desk can hold FX assumptions steady but should watch the flash-to-final revision and the festival-season pattern in the next print.
Fiscal
Revenue tracking flat; the bank-borrowing print still dates to June.
NBR Tax Revenue
Monthly NBR revenue was Tk 28,027cr in the Oct 2025 print, up from Tk 26,555cr a year earlier and Tk 22,005cr at the series start.
The series spans Jul 2023 to the Oct 2025 print, ranging Tk 21,478cr to a Tk 52,720cr peak.
Fiscal: monthly collections grind higher but stay volatile; a firmer revenue base eases reliance on bank borrowing — watch the pace against the FY target.
WATCH
- ◆A fresh government-borrowing print to update the Jun 2026 Tk 0.94tn read
- ◆The monthly NBR collection pace against the FY target
RISK
- ▼Government bank borrowing accelerating and crowding private credit
- ▼A revenue shortfall widening the deficit into H2
Iran War & Oil
Brent steady in the mid-90s; the energy import bill stays elevated.
Brent Crude
Brent ended at $96.28/bbl as of the 4 Sep print, near where it started the window ($95.59 in June) after a swing to a $71.18 low.
Since June the range was $71.18 to $100.38; crude sits back in the mid-90s, near the top of that band.
Risk: energy-importer credit lines face a heavier bill at mid-90s Brent — watch H2 receivables and the fuel-import share of the trade gap.
WATCH
- ◆Brent testing the $100 window high seen since June
- ◆Pass-through to the next month's fuel import bill and subsidy load
RISK
- ▼A supply shock lifting Brent above $100 and widening the trade gap
- ▼Sustained mid-90s crude eroding the reserve rebuild
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