Headlines
Distressed-bank news framed the week as oil and rate crosscurrents built.
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)
Bangladesh Bank held the corridor while overnight rates drifted lower this week.
FX Reserves
Gross reserves climbed to $36.42bn by the Jul 2026 print from $31.09bn last November; net reserves reached $31.60bn.
Off the Nov 2025 series low ($31.09bn), below the $37.58bn peak; Jul 2026 is the last plotted point.
Treasury: the reserve print lags spot FX by 42 days — watch the Aug 2026 read for the cover ratio.
WATCH
- ◆Whether call money holds below the 9.50% repo into next week
- ◆The 14-day term premium (12.00%) as a signal of a funding pocket
- ◆Any MPS signalling ahead of the next review
RISK
- ▼Excess liquidity meeting weak private-credit uptake (4.98% YoY, Aug 2026)
- ▼Reserve data ageing — the Jul 2026 print ($36.42bn) is 42 days old on our read
Banking
System NPLs sat at 32.78% for Q2 2026 as capital data aged.
Overnight Money Market
BOFR fell from 10.42% in April to 8.91% by the 10 Sep read; DOMMR eased from 10.09% to 8.80% over the same span.
Both sit near their series lows (BOFR 8.90%, DOMMR 8.80%) since the 15 Apr 2026 series start.
Treasury: overnight funding has repriced roughly 150bp cheaper since April; ALCO can term out at the short end.
WATCH
- ◆The next quarterly NPL print for Q3 2026
- ◆Deposit stability at the distressed Islami banks after the Tk1,040cr withdrawal
- ◆Any updated system CAR — the last read is Q3 2025
RISK
- ▼Deposit flight from distressed banks (Sammilito Islami, Tk1,040cr in three days)
- ▼Concentration — ten banks hold 72% of Tk6 lakh cr in defaults
- ▼Capital-adequacy visibility — CAR data is 346 days stale
Five sessions sharpened the banking question rather than resolving it. Concentration is now explicit — ten banks hold over 72% of Tk6 lakh cr in defaulted loans — and one distressed Islami bank saw Tk1,040cr withdrawn in three days, a reminder that deposit confidence, not a capital ratio the market cannot see, is the binding constraint. System NPLs held at 32.78% for Q2 2026, and the only CAR read is 346 days old, so lines to weaker names are sized off stale disclosure. Funding cost fell — BOFR (Bangladesh Overnight Financing Rate) eased to 8.91% and DOMMR (Dhaka Overnight Money Market Rate) to 8.80% by the 10 Sep read — yet cheaper liquidity is not reaching borrowers, as this week's coverage of weak loan demand showed. The desk stays defensive on second-tier bank exposure into the Q3 NPL print.
FX & External
The taka held near USD/BDT 123.03 while reserve and trade data aged.
External Flow Balance
Imports hit a series-high $7.51bn in the Jun 2026 print, while exports rose to $4.20bn from $3.35bn a year earlier.
Imports up from $4.39bn a year earlier; the export-import gap is at its widest of the series in Jun 2026.
Treasury: an oil-led import bill pressures the trade gap and, with it, USD/BDT and reserve cover into Q4.
WATCH
- ◆The Aug 2026 reserves read against the 42-day-old Jul print
- ◆USD/BDT pressure if a higher oil bill widens the trade gap
- ◆Gold's safe-haven run alongside Brent
RISK
- ▼Oil at $107 widening an already $3.31bn monthly trade gap (Jun 2026)
- ▼Reserve cover resting on the $36.42bn Jul print
- ▼Import-cost pass-through to the taka
DSE Markets
DSEX closed the week at 5,515.17, a 61-session low, on weak breadth.
DSEX Index
DSEX closed at 5,515.17 on 10 Sep, down from a 5,926.28 series peak and near flat versus 5,523.78 a year ago.
A 61-session low (5,483.00 on 08 Jun the last lower close); the index has round-tripped a full year.
Equity desk: watch 5,483.00 as support — a break opens the 4,702.69 series low; breadth negative.
WATCH
- ◆Whether the 08 Jun low of 5,483.00 holds as support next week
- ◆A turnover recovery above Tk544cr as a participation signal
- ◆Breadth after 230 decliners on 10 Sep
RISK
- ▼A break below the 08 Jun low of 5,483.00
- ▼Thin liquidity amplifying the downside
- ▼Bank-sector weakness dragging the index's largest weighting
Equities closed the week at a 61-session low. DSEX ended at 5,515.17 on 10 Sep, with 5,483.00 on 08 Jun the last lower close, and the index now sits below its level of a year ago (5,523.78 on 11 Sep 2025) — twelve months of index gains given back. Breadth confirmed the weakness: 230 stocks fell against 103 that rose on the final session, and turnover was thin at Tk544cr, a sign that the decline is drift rather than capitulation. The macro backdrop is not helping, as cheaper funding has not revived risk appetite and the bank-sector distress dominating the week's headlines sits on the exchange's largest weighting. Into next week the desk watches the 08 Jun low of 5,483.00 as the line that separates orderly drift from a fresh leg down.
T-Bonds & T-Bills
T-bill cut-offs eased 14–17bp at the 7 Sep auction as yields kept falling.
BD Govt Yield Ladder
Across the Jul–Sep 2026 prints yields fell sharply — 91-day 9.79% to 8.59%, 364-day 10.09% to 8.73%, 10-year 10.24% to 9.23%.
About 120bp lower at the short end since the Jul 2026 series start; Sep 2026 is the last plotted point.
Treasury: the curve has bull-flattened — lock duration now; ALCO should expect lower reinvestment yields on maturing paper.
WATCH
- ◆The next T-bill auction for confirmation the rally holds
- ◆A 10y bond refresh — the last read is the 21 Aug print
- ◆Any pickup in government borrowing that lifts supply
RISK
- ▼Duration risk if the oil-led import bill reverses the yield rally
- ▼Reinvestment risk on maturing short paper at lower cut-offs
- ▼A stale 10y read (21 Aug) masking curve moves
Macro & Inflation
12-month CPI held at 8.66% in Jul 2026, real policy rate near 1.2%.
CPI Trend
12-month CPI eased to 8.66% by the Jul 2026 print from 9.95% two years back, near its 8.59% series low; food p2p was 8.6% at its Jun 2026 point.
Just above the 8.59% series low reached this cycle; the Jul 2026 reading is the latest plotted 12-month average.
Credit/ALCO: disinflation has stalled above 8% — the 30 Jul cut to 9.50% leaves the real rate near 1.2% and limits further easing.
WATCH
- ◆The Aug 2026 CPI print for confirmation disinflation resumes
- ◆The next MPS given the thin 1.18% real rate
- ◆Whether private credit lifts off 4.98%
RISK
- ▼Oil at $107 feeding back into food and non-food CPI
- ▼Money growth (11.11%) outpacing credit — funding the deficit, not investment
- ▼REER (Real Effective Exchange Rate) at 102.78 eroding export competitiveness
Remittance
The Aug 2026 flash put monthly remittance at $2.97bn, above July.
Remittance Inflow
Monthly remittance was $2.86bn at the Jul 2026 plotted point, up from $2.42bn a year earlier, within a series range of $2.42bn to $3.76bn.
The Jul 2026 point is the latest plotted; inflows are up from the $2.42bn series low of Aug 2025.
Treasury: remittance is the external account's most reliable inflow — a partial hedge against the oil-led import bill.
WATCH
- ◆Confirmation of the Aug 2026 flash in the final BB print
- ◆Whether inflows hold above $2.9bn into Q2 FY27
- ◆Remittance as the offset to an oil-driven trade gap
RISK
- ▼Flash figures revised down at the final print
- ▼A channel shift to informal transfers if the rate gap widens
- ▼A seasonal fade after the August level
Fiscal
NBR had collected BDT 4.15tn year to date on the latest read.
NBR Tax Revenue
Monthly NBR revenue was BDT 28,027cr in the Oct 2025 print, up from BDT 26,555cr a year earlier, well below the BDT 52,720cr peak.
The Oct 2025 reading is the last plotted point; the series ranges BDT 21,478cr to BDT 52,720cr since Jul 2023.
Fiscal desk: monthly collections stay seasonal and below peak — expect continued reliance on bank borrowing to fund the deficit.
WATCH
- ◆The next NBR monthly collection update against the FY27 target
- ◆A refreshed government bank-borrowing figure — the last is Jun 2026
- ◆State-asset divestment terms after this week's report on unsolicited bids
RISK
- ▼A revenue shortfall forcing heavier bank borrowing and crowding out private credit
- ▼Borrowing data 73 days stale
- ▼Contingent claims such as the Tk 6.66b Grameen Kalyan tax order
Iran War & Oil
Brent climbed to $107.37, its series high, pressuring the import bill.
Brent Crude
Brent rose to $107.37/bbl by the 10 Sep point, the peak of the series that began at $86.71 on 13 Jun and bottomed at $71.18.
The 10 Sep reading is the series high; Brent has round-tripped from a $71.18 low to $107.37 since mid-June.
Treasury/credit: at a series-high $107, energy-importer credit lines face rollover stress next cycle — watch import-cost pass-through to CPI.
WATCH
- ◆Brent's path above $107 and any OPEC+ or geopolitical trigger next week
- ◆Pass-through to the next CPI print (currently 8.66%, Jul 2026)
- ◆The trade gap and reserve cover as the fuel bill rises
RISK
- ▼Sustained $100+ oil widening the Jun 2026 trade gap of $3.31bn
- ▼Fuel-subsidy and energy-import financing pressure on reserves
- ▼Second-round inflation feeding into rates
Oil was the week's dominant mover. Brent ended at $107.37/bbl, the high of an 81-session series that bottomed at $71.18, with WTI at $102.20 — a supply-and-geopolitics move, not a demand story. For Bangladesh the transmission is direct: fuel is imported, so a sustained $107 widens a trade gap already at $3.31bn in the Jun 2026 print and drains reserves last read at $36.42bn for Jul 2026. It also threatens disinflation, with the 12-month CPI stalled at 8.66% and the real policy rate only 1.18% — little buffer for an energy shock. The mispricing into next week is any domestic asset assuming cheap oil: the yield rally that took T-bill cut-offs to 8.59% and the taka's steadiness near USD/BDT 123.03 both rest on an oil price that has turned against them. The desk hedges energy-importer credit exposure and treats oil as the swing factor for FX and rates.
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