Headlines
Sector stress crowds the front pages; asset quality is the through-line.
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)
Policy on hold; the corridor is doing the work as call money drifts down.
FX Reserves
Gross reserves rose from $31.09bn (Nov 2025) to $36.42bn by the Jul 2026 print, below the $37.58bn series high.
Net reserves also rose, from $26.40bn (Nov 2025) to $31.60bn on the Jul 2026 print.
Treasury: buffer rebuilt to $36.42bn, but this is the Jul 2026 print — watch the next refresh before sizing FX cover.
WATCH
- ◆14-day call money at 12.0% against the 11.0% SLF ceiling
- ◆the next reserves refresh after the Jul 2026 print
- ◆whether call money holds above the 7.5% SDF floor
RISK
- ▼term-money stress leaking into the overnight rate
- ▼a stale reserves print masking cover erosion behind the peg
The rate structure and the lending data are pulling in opposite directions. Bangladesh Bank has kept the corridor steady — 9.5% repo, 7.5% SDF, 11.0% SLF — and the market has followed it down, with overnight call money at 8.69% on the 11 Sep read, near the lower half of the band. Yet cheaper funding has not turned into credit: private credit growth was 4.98% in the August print, and the wires today carry 'money gets cheaper, yet takers are hard to get.' Banks are holding liquidity they will not deploy while balance-sheet repair dominates. For the desk, the easing is arithmetic rather than stimulus — and 14-day call money at 12.0%, above the 11.0% SLF ceiling, shows the funding curve is not uniformly soft. That argues for holding duration over chasing loan growth into a weak credit cycle.
Banking
Defensive on bank credit; the tail risk sits in a handful of balance sheets.
Overnight Money Market
BOFR eased to 8.91% and DOMMR to 8.80% by the 10 Sep print, both down from above 10% in mid-April.
DOMMR's series low is 8.80% on the 10 Sep print; BOFR bottomed at 8.90% over the same window.
Treasury: interbank funding is cheap and easing, but credit demand is absent — expect liquidity to sit idle until asset-quality repair advances.
WATCH
- ◆state-owned banks' share of the Tk6 lakh crore default stock
- ◆the pending CAR refresh after the Q3 2025 print
- ◆deposit stability after the Tk1,040cr Sammilito Islami Bank outflow
RISK
- ▼provisioning shortfalls forcing fresh capital calls
- ▼deposit flight spreading from weak Islamic banks
- ▼a stale CAR masking real capital erosion
The banking system is in the balance-sheet-repair phase of the credit cycle, and the data explains why cheaper money alone will not restart lending. NPLs were 32.78% of loans in the Q2 2026 print, while funding rates have fallen hard — BOFR (Bangladesh Overnight Financing Rate) and DOMMR (Dhaka Overnight Money Market Rate) both sat near 8.9% on the 10 Sep read, down from above 10% in mid-April. Yet the wires carry deposit flight at a weak Islamic bank — Tk1,040cr pulled in three days — and no takers for credit. Banks carrying a Tk6 lakh crore default stock cannot lend into it, and depositors at the weakest names are moving out. For the desk, the position stays defensive on bank credit and selective on counterparties: the sector average hides a wide gap between clean private banks and the state-owned and distressed Islamic names that carry the tail.
FX & External
Spot rate anchored near 123; external gap and reserves lag on old prints.
External Flow Balance
Imports hit a series-high $7,512mn in the Jun 2026 print against $4,203mn of exports, widening the monthly goods gap.
Exports were $3,350mn a year earlier (Jun 2025) and imports $4,391mn then — both flows have risen sharply since.
Risk: the goods gap is widening faster than exports; remittance at $2,859mn (Jul 2026 print) is the offset the desk should track.
WATCH
- ◆the pending reserves refresh after the Jul 2026 print
- ◆USD/BDT drift around the 123 level
- ◆the July–August export flow when it prints
RISK
- ▼a widening trade gap draining reserves faster than the July print shows
- ▼import-bill pressure from Brent above $100
DSE Markets
Breadth negative, turnover thin; the index is grinding lower.
DSEX Index
DSEX at 5,515.17 on the 10 Sep print is roughly flat over 12 months (5,468.35 a year ago), after ranging 4,703 to 5,926.
Latest close marks a 61-session low (5,483.00 on 08 Jun the last lower close).
Equity desk: a year of net-nil returns with weak breadth argues for staying underweight until turnover and participation recover.
WATCH
- ◆turnover holding below Tk600cr as a participation gauge
- ◆whether DSEX holds the 08 Jun 5,483.00 support
- ◆the declining-to-advancing breadth ratio
RISK
- ▼thin liquidity amplifying downside on any forced selling
- ▼banking-sector weakness dragging the index
T-Bonds & T-Bills
Cut-offs drifting down with the policy easing; the curve stays gently upward.
BD Govt Yield Ladder
Across the July–September window, yields fell sharply — the 364-day T-bill from 10.09% to 8.73% and the 10-year from 10.24% to 9.23%.
All plotted tenors are at their three-month lows on the Sep 2026 print, off July highs above 10%.
ALCO: the curve has repriced 100–135bp lower since July — expect funding costs to follow and floating-rate loan books to reset down.
WATCH
- ◆the next 364-day cut-off as a rate-path signal
- ◆the 10-year refresh after the 21 Aug print
- ◆auction bid-cover as a demand gauge
RISK
- ▼duration repricing if inflation prints surprise higher
- ▼a stale long-end quote mispricing ALM (Asset Liability Management) hedges
Macro & Inflation
Real rate barely positive at 1.18%; M2 growth highest since 2021.
CPI Trend
The 12-month average CPI eased to 8.66% by the Jul 2026 print from 9.77% a year earlier, near the series low of 8.59%.
Still 8.66% on the Jul 2026 print, just above the 8.59% series low and well off the 10.34% peak.
Treasury: with the real policy rate at just 1.18%, sticky disinflation gives the MPC little room — expect a hold at the next MPS.
WATCH
- ◆the August CPI 12-month average when it prints
- ◆private credit growth beyond the 4.98% August pace
- ◆the REER (Real Effective Exchange Rate) refresh after the Mar 2026 print at 102.78
RISK
- ▼sticky non-food inflation at 9.28% keeping the real rate thin
- ▼M2 growth outpacing credit signalling deposit hoarding
The macro backdrop is disinflation that has stalled short of comfort and an easing that is not reaching the real economy. The 12-month average CPI was 8.66% in the Jul 2026 print, with non-food inflation still 9.28%, leaving the real policy rate at just 1.18% after the July repo cut to 9.5%. M2 grew 11.11% in the Jun 2026 print while private credit growth was only 4.98% in the August read — liquidity is expanding but flowing into government paper and deposits, not new private lending. On the currency side, REER (Real Effective Exchange Rate) was 102.78 in the Mar 2026 print, the highest since Nov 2025 (103.55 then), which keeps the taka richer in real terms even as the nominal peg holds near 123. For the desk, the mix argues for a hold at the next MPS and for holding government paper over credit while transmission stays blocked.
Remittance
Inflows firm above $2.9bn; a steady support for the external account.
Remittance Inflow
Monthly remittance was $2,858.68mn in the Jul 2026 print, up from $2,421.9mn a year earlier, having peaked at $3,755.1mn in the window.
That is the series low a year ago ($2,421.9mn in Aug 2025); inflows have trended up since.
Treasury: remittance is the steadiest inflow supporting reserves — track the September flash as the offset to a widening import bill.
WATCH
- ◆the September remittance flash for continuation
- ◆the revised August print against the $2.97bn flash
- ◆the spread between formal and informal channels
RISK
- ▼a provisional figure revising lower on final data
- ▼a seasonal fade after the post-Eid period
Fiscal
Revenue running at BDT 4.15tn; borrowing data lags on a June print.
NBR Tax Revenue
Monthly NBR revenue was BDT 28,027cr in the Oct 2025 print, up from BDT 26,555cr a year earlier; the series has ranged BDT 21,478–52,720cr.
That is a 5.5% year-on-year rise on the Oct 2025 print, still far below the BDT 52,720cr series peak.
Fiscal: a mid-single-digit revenue pace keeps pressure on bank borrowing to fund the deficit — watch T-bill supply.
WATCH
- ◆the government bank-borrowing refresh after the Jun 2026 print
- ◆the NBR monthly run-rate against the FY target
- ◆the T-bill and T-bond issuance calendar for financing pressure
RISK
- ▼a borrowing pickup crowding out private credit
- ▼a revenue shortfall widening the financing gap
Iran War & Oil
Crude elevated near cycle highs; the import bill stays pressured.
Brent Crude
Brent climbed from $83.64 (16 Jun) to $104.80 by the 11 Sep print, up 25%, with a $107.37 high in the window.
The low was $71.18 in the same window; crude has round-tripped from summer weakness to a September high near $107.
Risk: sustained Brent above $100 lifts the import bill — watch energy-importer credit lines for 60–90 DPD (Days Past Due) stress on the next refinancing cycle.
WATCH
- ◆Brent holding above $100 into the next refinancing cycle
- ◆the pass-through to the July–August import bill
- ◆any Gulf supply-escalation headlines
RISK
- ▼a fresh oil spike widening the trade gap and draining reserves
- ▼fuel-subsidy and power-cost pressure on the fiscal side
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