Headlines
The activity gauge turned down in August as the trade gap widened.
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 short end drifts lower with ample liquidity.
FX Reserves
Gross reserves climbed to $36.42bn by the Jul 2026 print from $31.09bn in Nov 2025, a $5.33bn build.
Series high was $37.58bn; the Jul 2026 read of $36.42bn sits just below that within the window.
Treasury: buffer rebuilt from the November low, but confirm the level holds on the next monthly release before easing FX cover assumptions.
WATCH
- ◆Call money against the 9.50% repo into month-end funding
- ◆The next reserves print to confirm the $36.42bn Jul level holds
RISK
- ▼A liquidity reversal pushing call money back toward the 11.00% SLF ceiling
- ▼Reserve drawdown if the trade gap re-widens
Banking
Bad loans near a third of the book; capital read badly dated.
Overnight Money Market
BOFR fell to 9.18% by 8 Sep 2026 from 10.42% in mid-April; DOMMR eased to 9.03% from 10.09% over the same window.
Both benchmarks now sit at their window lows — 9.18% and 9.03% — down from April highs above 10.4%.
Credit: funding is cheap, but the NPL and capital picture caps how much of that relief reaches lending margins.
WATCH
- ◆The next CAR disclosure to refresh the Q3 2025 read
- ◆NPL trajectory in the Q3 2026 print
- ◆Provisioning coverage against the Tk 2.0tn shortfall
RISK
- ▼Further capital erosion at SCBs concentrating system tail risk
- ▼Provisioning drag compressing sector profitability and lending capacity
The banking book is where the day's easing runs into a wall. Bangladesh Bank has pulled the money-market rate down — BOFR (Bangladesh Overnight Financing Rate) eased to 9.18% on 8 Sep from 10.42% in mid-April, DOMMR (Dhaka Overnight Money Market Rate) to 9.03% — so funding is cheaper across the system. The asset side has not healed: NPLs were 32.78% of loans in the Q2 2026 print, capital adequacy last read 1.56% for Q3 2025, and the reported provisioning shortfall has crossed Tk 2.0tn. Cheaper liabilities do not repair a book whose bad-loan stock sits near a third of lending, concentrated in a handful of state-owned banks. For the desk, that concentration is the point: system averages overstate SCB health, so pricing counterparty and issuer risk off the aggregate misreads it. Stay defensive on SCB and bank-equity exposure until a capital-refresh print lands.
FX & External
Taka anchored; external data dated but the trade gap still bites.
External Flow Balance
Monthly exports were $4.20bn in the Jun 2026 print against imports of $7.51bn, the widest import reading in the two-year window.
Exports at $4.20bn top the year-earlier $3.35bn (Jun 2025), but imports have climbed to a two-year high.
Treasury: the goods gap keeps FX cover reliant on remittance; watch the July trade print before easing hedging on import lines.
WATCH
- ◆The next reserves print to confirm the $36.42bn Jul level
- ◆July–August export momentum after the $4.20bn Jun read
- ◆Remittance carrying the external account while the goods gap stays wide
RISK
- ▼A re-widening import bill draining the reserve build
- ▼Peg pressure if remittance softens into Q2 FY27
DSE Markets
Equities at a 57-session low even as funding costs fall.
DSEX Index
DSEX ended at 5,539.32 on 8 Sep 2026, a 57-session low, and sits near the bottom of a 12-month range that spanned 4,702.69 to 5,926.28.
A 57-session low (5,520.40 on 11 Jun the last lower close); the index is flat on its year-ago close.
Equity desk: falling yields are not translating into risk appetite; watch turnover and breadth before adding, not the index level alone.
WATCH
- ◆Turnover recovering above BDT 700–800cr as a confidence signal
- ◆Whether DSEX holds the 5,520.40 (11 Jun) support
RISK
- ▼Breadth staying negative pulling the index below the June low
- ▼Thin liquidity amplifying downside on any bank-sector headline
The equity market is the clearest read on how little the rate cuts have bought. Since July the curve has fallen hard — the 364-day T-Bill cut off at 8.73% on 7 Sep against 10.09% two months earlier, call money is 8.87%, and money-market benchmarks have eased more than a point — yet DSEX printed a 57-session low of 5,539.32 on 8 Sep, closed essentially where it stood a year ago (5,538.25 on 9 Sep 2025), on BDT 590cr of turnover with decliners beating advancers three to one. Cheaper money should lift equity valuations; it is not. What sits between the two is the banking book — NPLs near a third of loans, a provisioning shortfall past Tk 2.0tn — a heavy index weight and a heavier confidence problem. For the desk, lower yields are not an equity buy signal here: stay underweight the index and selective in banks until turnover and breadth confirm a base.
T-Bonds & T-Bills
Bills richening as the curve keeps sliding toward the policy floor.
BD Govt Yield Ladder
The 364-day T-Bill yield fell from 10.09% in the Jul 2026 print to 8.73% by the Sep 2026 print, down about 135bp.
The whole monthly curve has fallen more than a point since July; the 10-year is down to 9.23% from 10.24%.
Treasury: bills now price below the 9.50% repo; watch reinvestment risk as maturing paper rolls into lower cut-offs.
WATCH
- ◆The next T-Bill auction to confirm the sub-8.75% path
- ◆A fresh long-end quote to update the 21 Aug 9.15%/9.23% reads
RISK
- ▼Reinvestment risk on maturing bills as cut-offs fall
- ▼Duration exposure if inflation prints re-steepen the long end
The curve is doing exactly what an easing cycle should. Every T-Bill tenor has fallen more than a percentage point since July — the 364-day from 10.09% to 8.73%, the 182-day from 9.99% to 8.65%, the 91-day from 9.79% to 8.59% — and the long-end monthly reads have come down with them, the 10-year from 10.24% to 9.23% and the 20-year from 10.40% to 9.13%. With the repo at 9.50% and call money at 8.87%, bill yields now sit below the policy rate, which says the market expects the easing to hold or extend. For the desk, the move rewards duration taken earlier and raises reinvestment risk on the front end: maturing bills roll into lower cut-offs. The mispricing to watch is the gap between a curve pricing sustained easing and an inflation path (12-month CPI 8.66% on the Jul print) that has not yet confirmed it.
Macro & Inflation
Prices still hot, credit still soft — the mix stays uncomfortable.
CPI Trend
The 12-month average CPI eased to 8.66% by the Jul 2026 print from 9.95% two years earlier, holding just above its 8.59% series low.
Down from 9.77% a year ago (Jul 2025), still above target and above the 8.59% series low.
ALCO: inflation is sticky above target while the real policy rate is thin at 1.18%; expect BB to hold, not cut further, near-term.
WATCH
- ◆The August CPI print to confirm whether the 12-month average is topping
- ◆Private-credit growth off the 4.98% August read as a demand gauge
RISK
- ▼Sticky non-food inflation above 9% eroding the thin positive real rate
- ▼Weak private credit signalling demand softness alongside the sub-50 activity gauge
Remittance
Inflows still the external account's dependable leg, up on the year.
Remittance Inflow
Monthly remittance was $2.86bn in the Jul 2026 print, up from $2.42bn a year earlier, within a window that peaked at $3.76bn.
The $2.86bn Jul 2026 read is up sharply from the $2.42bn Aug 2025 low, below the $3.76bn window high.
Treasury: remittance is carrying the external account; a sustained step above $3bn would ease reserve pressure into the next import cycle.
WATCH
- ◆Confirmation of the $2.97bn August flash in the final print
- ◆Whether inflows hold above $2.8bn into the autumn
RISK
- ▼Flash revision lower trimming the external cushion
- ▼Seasonal fade after the mid-year peak
Fiscal
Revenue inching up; the borrowing figure is a June read.
NBR Tax Revenue
Monthly NBR revenue was BDT 28,027cr in the Oct 2025 print, up from BDT 26,555cr a year earlier and BDT 22,005cr at the series start.
The series ranged from BDT 21,478cr to a BDT 52,720cr peak; the Oct 2025 read sits in the lower half.
Fiscal: monthly collection is trending up year-on-year but well off peak; watch the run-rate against FY27 targets before assuming lower deficit financing.
WATCH
- ◆A refreshed government bank-borrowing print past the Jun BDT 0.94tn read
- ◆NBR run-rate against the FY27 revenue target
RISK
- ▼A borrowing pickup crowding the money market as yields fall
- ▼Revenue shortfall widening the deficit and bank-financing need
Iran War & Oil
Oil near the top of its range, a live import-cost risk.
Brent Crude
Brent was $98.63 as of the 8 Sep 2026 print, up from $96.00 in mid-June and near the $100.38 top of the range.
The window swung from a $71.18 low to a $100.38 high since 11 Jun; crude is back near the top.
Risk: near-$100 Brent is an import-cost and inflation channel; watch the next trade and CPI prints for pass-through.
WATCH
- ◆Brent holding above $95 versus fading back toward the $71 range low
- ◆Fuel and fertiliser import costs feeding the next trade print
RISK
- ▼A sustained move above $100 widening the import bill and trade gap
- ▼Pass-through to non-food inflation already at 9.28%
Every morning.
Free.