Headlines
Banking-sector stress leads; equities sold off as deposit-run fears spread.
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 at 9.5%; call money steady near the corridor floor.
FX Reserves
Gross reserves rose to $36.42bn as of the Jul 2026 print from $31.09bn in Nov 2025, the series peaking at $37.58bn.
Eight months of accumulation off the Nov 2025 low of $31.09bn; the Jul 2026 print is the latest read.
Treasury: the reserve build eases FX-funding pressure, but the cover ratio behind it rests on a print now weeks old.
WATCH
- ◆Call money drift toward the 11.0% SLF ceiling if deposit-run stress spreads
- ◆Timing of the August reserves refresh past the Jul 2026 print
RISK
- ▼Deposit flight from stressed banks tightening interbank liquidity
- ▼Reserve cover resting on a Jul 2026 print
The corridor is doing its job even as headlines turn on the banking system. Overnight call money closed at 9.15% on 6 Sep, barely above the 7.5% SDF floor and well below the 11.0% SLF ceiling, which says system liquidity is ample and the stress at Sammilito Islami Bank has not yet propagated into interbank funding. That distinction matters for the desk: a run confined to a single stressed lender is an idiosyncratic deposit event, while call money spiking toward the SLF ceiling would signal it had become a system funding problem. Reserves at $36.42bn in the Jul 2026 print, up from $31.09bn last November, give room to backstop without draining taka liquidity. Watch the 7-day and 14-day tenors — 9.14% and 9.74% — for the first sign the term structure is repricing bank credit risk.
Banking
NPLs at 32.78% on the Q2 print; state banks carry the tail.
Overnight Money Market
Overnight funding rates eased to 9.19% and 9.25% as of the 6 Sep print, both down from above 10% in mid-Apr 2026.
Rates have fallen through the summer off the 10.65% April peak, tracking the July repo cut.
Treasury: cheaper overnight funding cushions banks, but a deposit run at a stressed lender could reverse it fast.
WATCH
- ◆Deposit-run contagion beyond Sammilito Islami Bank
- ◆Q3 2026 NPL disclosure for the next system reading
- ◆Provisioning shortfall against the Q3 2025 CAR of 1.56%
RISK
- ▼State-bank recapitalisation demand landing on the fiscal side
- ▼Counterparty exposure to stressed Shariah-based lenders
- ▼Deposit flight forcing distressed asset sales
The banking system's credit problem turned concrete this week. NPLs stood at 32.78% in the Q2 2026 print, near the top of the series, and the stock is concentrated — six state banks hold close to Tk 1.5tn of it, Janata the largest single share. Aggregate CAR on the Q3 2025 print, the latest read and nearly a year old, was 1.56%, leaving almost no cushion to absorb fresh provisioning. The transmission is running through deposits: Sammilito Islami Bank has readied Tk 5,000cr against Tk 4,000cr of withdrawal requests in four days, and equities repriced the risk on 6 Sep as DSEX closed at a 48-session low. For the desk, the exposure to manage is counterparty and funding lines to stressed state and Shariah-based lenders, not the index level. Watch whether the run stays contained or the Q3 print confirms wider deterioration.
FX & External
Taka firm at 122.85; reserves at $36.42bn on the Jul print.
External Flow Balance
Exports were $4.20bn in the Jun 2026 print, up from $3.35bn a year earlier, while imports ran at $7.51bn, widening the monthly goods gap.
Exports up about 25% year-on-year off the Jun 2025 read of $3.35bn; imports at a series high of $7.51bn.
Treasury: the goods gap stays wide; remittance at $2.86bn in the Jul 2026 print is the main offset funding it.
WATCH
- ◆August export and remittance flash for the next flow reading
- ◆Timing of the August reserves refresh past the Jul 2026 print
- ◆Gold at $4,476/oz as a reserve-valuation tailwind
RISK
- ▼Goods gap widening if imports hold at the $7.51bn Jun high
- ▼Reserve cover resting on a Jul 2026 print
DSE Markets
DSEX down 1.83% to a 48-session low; 348 issues fell, 20 rose.
DSEX Index
DSEX closed at 5,558.45 as of the 6 Sep print, down 1.83% on the day and roughly flat over 12 months from 5,636.15.
The close marks a 48-session low (5,554.18 on 22 Jun the last lower close).
Risk: breadth is the tell — 348 fell against 20 rising, a broad de-risking, not sector rotation.
WATCH
- ◆Whether turnover recovers or the sell-off feeds on thin volume
- ◆Bank-heavy DS30 for signs the selling concentrates in financials
- ◆Deposit-run headlines as the near-term sentiment driver
RISK
- ▼Forced selling if margin positions unwind on further falls
- ▼Contagion from bank deposit stress into broader equities
- ▼Liquidity thinning as turnover stays near Tk 545cr
The equity market is now the clearest real-time gauge of banking-sector fear. DSEX fell 1.83% to 5,558.45 on 6 Sep, a 48-session low, and the breadth was the tell — 348 issues declined against just 20 that rose, which is broad de-risking rather than a sector rotation. The trigger is credit, not equities: six state banks' NPLs are reported near Tk 1.5tn, and Sammilito Islami Bank has readied Tk 5,000cr against Tk 4,000cr of withdrawal requests in four days. Turnover stayed thin at Tk 545cr, so the fall came on light volume, which cuts both ways — it exaggerates the move but also means little forced selling has hit yet. For the desk, the index level matters less than the mechanism: if the deposit run spreads, financials lead the next leg down and turnover tells you when capitulation arrives. Position defensive on bank equity; watch volume for the turn.
T-Bonds & T-Bills
T-bill cut-offs eased to 8.73–8.89% at the August auctions.
BD Govt Yield Ladder
The 91d T-Bill cut-off eased to 8.73% as of the Sep 2026 print from 9.79% in Jul 2026, and the 10y yield fell to 9.23% from 10.24%.
Yields have fallen across the curve since the Jul 2026 repo cut, the short end down over 100bp in three prints.
Treasury: the curve is repricing lower with the policy easing; expect cheaper government funding and gains on bond books.
WATCH
- ◆Next auction cut-offs for confirmation the easing holds
- ◆5y and 10y refresh past the 21 Aug 2026 print
- ◆Government borrowing appetite at lower yields
RISK
- ▼Duration risk if inflation surprises and yields snap back
- ▼Thin secondary liquidity in the long end
Macro & Inflation
12-month CPI at 8.66% on the Jul print; real policy rate positive at 1.18%.
CPI Trend
The 12-month average CPI eased to 8.66% as of the Jul 2026 print, down from 9.77% a year earlier and off a peak of 10.34%.
Down from 9.95% at the series start in Aug 2024, now near the 8.59% series low.
Treasury: disinflation is gradual; with the repo at 9.5%, the real policy rate stays modestly positive at 1.18% on the Jul read.
WATCH
- ◆The August CPI print for a further month of disinflation
- ◆REER (Real Effective Exchange Rate) at 102.78 on the Mar 2026 print, highest since Nov 2025 (103.55 then), for export competitiveness
- ◆Private credit growth stuck near 4.98%
RISK
- ▼Non-food inflation sticky at 9.28% on the Jul print
- ▼Import cover at 4.85 months on the Jun 2026 read thinning if the goods gap widens
- ▼Weak private credit signalling soft investment demand
Remittance
August remittance flash at $2.97bn, up from $2.82bn — still the key FX offset.
Remittance Inflow
Monthly remittance was $2.86bn as of the Jul 2026 print, up from $2.42bn a year earlier, off a series peak of $3.76bn.
Inflows up about 18% year-on-year from the Aug 2025 read of $2.42bn, though below the $3.76bn peak.
Treasury: remittance remains the main offset to the wide goods gap; sustained inflows support the reserve rebuild.
WATCH
- ◆Confirmation of the August flash in the final print
- ◆Whether inflows hold above $2.8bn into Q3
- ◆Festival-season seasonality in remittance flows
RISK
- ▼Provisional August figure subject to revision
- ▼A pullback below $2.8bn narrowing the FX offset
Fiscal
NBR collected Tk 4.15tn year-to-date; government bank borrowing Tk 0.94tn on the Jun print.
NBR Tax Revenue
Monthly NBR revenue was Tk 28,027cr as of the Oct 2025 print, up from Tk 26,555cr a year earlier.
Collections up about 5.5% year-on-year on the Oct 2025 read, off a series that peaked at Tk 52,720cr.
Fiscal: revenue momentum is modest, keeping pressure on the government to lean on bank borrowing.
WATCH
- ◆Monthly NBR run-rate against the FY revenue target
- ◆Government borrowing refresh past the Jun 2026 print
- ◆The NBR split into implementation and tax-policy wings
RISK
- ▼Revenue shortfall forcing heavier domestic bank borrowing
- ▼Crowding-out of private credit if borrowing accelerates
Iran War & Oil
Brent at $96.28 and WTI at $91.48; the import bill stays heavy.
Brent Crude
Brent was $96.28/bbl as of the 4 Sep print, up from $94.35 in early June, within a range that has run $71–$100.
Elevated but off the $100.38 series high; the June–September band has held above $71.
Credit: sustained $90s Brent keeps the energy import bill high; watch LNG-supply headlines for a further squeeze.
WATCH
- ◆Qatar LNG supply talks and any resumption timeline
- ◆Brent breaking above the $100.38 recent high
- ◆Pass-through to the fuel import bill in H2
RISK
- ▼Energy-importer credit lines seeing receivables stretch on higher fuel costs
- ▼LNG supply disruption widening the trade gap
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