Headlines
Private credit below 5% for a fifth month leads a banking-heavy wire.
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 steady at 9.50%; reserves at $37.35bn give the corridor room.
FX Reserves
Gross reserves climbed to $37.35bn by the Aug 2026 print from $33.19bn in Dec 2025, near the series high of $37.58bn.
Up roughly $4bn since the Dec 2025 series low ($33.19bn), a nine-month climb.
Treasury: a fuller reserve buffer widens BB's room to hold the taka and the policy corridor steady.
WATCH
- ◆Call money drift toward the 11.00% SLF ceiling as a liquidity signal
- ◆Whether reserves hold above $37bn into the September print
RISK
- ▼A call-money spike would tighten funding ahead of any policy change
- ▼Reserve gains reversing if import demand rebounds on cheaper funding
Banking
System NPL near a third of loans; capital cover pending a fresh print.
Overnight Money Market
DOMMR eased to 8.70% by the 16 Sep print from 10.09% in mid-April, with BOFR down to 8.74% from 10.42%.
Down about 140bp since the 15 Apr 2026 series start (10.09% then), tracking the broader rate easing.
ALCO: cheaper overnight funding supports margins, but watch the gap to the 9.50% policy rate for signs liquidity is tightening.
WATCH
- ◆A current CAR print — the last read is Q3 2025
- ◆Whether the next quarterly NPL holds near the Q2 2026 32.78%
RISK
- ▼A 1.56% capital base leaves little room to absorb further Q3 2026 slippage
- ▼Funding costs for weaker banks if the NPL trend extends past Q2
Two forces pull in opposite directions across the banking book. On the asset side, the system NPL ratio sat at 32.78% in the Q2 2026 print — close to a third of all loans — while the only capital reading on file, a 1.56% CAR for Q3 2025, is a year stale and cannot tell the desk how much loss-absorption remains. On the funding side, interbank money has eased hard: DOMMR (Dhaka Overnight Money Market Rate) fell to 8.70% by 16 Sep from above 10% in April, and BOFR (Bangladesh Overnight Financing Rate) tracked it to 8.74%. Cheaper overnight funding lifts net interest margins at the margin, but does nothing for a capital shortfall or for provisioning against distressed assets. The split argues for names with visible capital headroom and against lenders whose margins lean on cheap funding to cover thin buffers. Read the easing in call rates as a liquidity signal, not a solvency one.
FX & External
Taka firm at 123.19; reserves near $37.4bn cushion the external front.
External Flow Balance
Exports reached $4.20bn in the Jun 2026 print, up from $3.35bn a year earlier, but imports hit a series-high $7.51bn, widening the monthly trade gap.
Imports at their highest in the 24-month series ($7.51bn), up from $4.39bn in Jun 2025.
Treasury: imports outrunning exports keep pressure on the taka despite firmer reserves; watch H2 import-payment demand.
WATCH
- ◆The September reserve print for confirmation of the climb
- ◆Whether a refreshed export figure holds the June $4.20bn run-rate
RISK
- ▼Stale June trade data masking a wider current deficit
- ▼Reserve gains reversing if imports rebound on cheaper funding
DSE Markets
DSEX at 5,494, level with a year ago; turnover thin at BDT 556cr.
DSEX Index
DSEX closed at 5,494 on 16 Sep, level with 5,492 a year earlier, after a year that ranged from 4,703 to 5,926.
A full year of round-trip: the index ends within two points of its 17 Sep 2025 level (5,492).
Watch turnover, not the level: only a sustained volume pickup will confirm the yield rally is rotating cash into equities.
WATCH
- ◆Turnover — a durable break above BDT 800–1,000 crore would signal real rotation
- ◆Whether falling T-Bill yields start to lift equity volumes
RISK
- ▼Thin volumes leave the index vulnerable to sharp single-day swings
- ▼A full year of flat returns testing retail participation
The case for Bangladesh equities this quarter rests on the risk-free rate, and that rate has moved a long way. The 364-day T-Bill cut-off has fallen to 8.42% from 10.09% in July, the 10-year bond to 8.54%, and interbank money to 8.70% — roughly 150–170bp of easing across the curve in a single quarter. A lower discount rate lifts the present value of equity cash flows and makes fixed-income yields less of a competitor for household savings. Yet the DSEX sits at 5,494, within two points of a year ago, and turnover of BDT 556 crore is thin. The market is pricing the rate move as if it were temporary, or waiting for it to show up in earnings and credit growth — and private credit is still stuck below 5%. The desk stays neutral on the index and treats a sustained lift in turnover, not the level, as the signal that the rate rally is finally rotating into stocks.
T-Bonds & T-Bills
Yields down roughly 170bp since July across bills and bonds alike.
BD Govt Yield Ladder
The 10-year yield fell to 8.54% by the Sep 2026 print from 10.24% in July, with the 364-day T-Bill down to 8.42% from 10.09%.
A roughly 170bp drop across a single quarter, July to September 2026, on all plotted tenors.
Treasury: risk-free rate reset lower; take duration profit near the corridor floor and expect issuance to fund cheaper.
WATCH
- ◆The next T-Bill auction for confirmation the easing has a floor
- ◆Whether the 10-year holds at 8.54% or resumes falling
RISK
- ▼Yields overshooting lower if liquidity stays ample, squeezing bank net interest margins
- ▼A renewed government borrowing push reversing the auction rally
The government's cost of money has fallen faster than almost any other price in the system this quarter. Across July to September the 364-day T-Bill cut-off dropped from 10.09% to 8.42%, the 10-year bond from 10.24% to 8.54%, and the 15- and 20-year tenors have eased to around 9.1%. Two things are driving it: ample interbank liquidity — call money is printing 8.73%, below the 9.50% policy rate — and softer 12-month inflation. For the desk, a 170bp fall in the risk-free rate reprices everything: existing bond holdings have gained, new issuance funds the deficit more cheaply, and the hurdle rate for equities has dropped. The asymmetry now runs the other way — with cut-offs already near the policy corridor floor, the room for further rate gains on duration is narrowing. The desk takes profit on the long end and holds the belly.
Macro & Inflation
CPI 12m-avg eased to 8.66% on the August print; credit still soft.
CPI Trend
The 12-month average CPI has eased to 8.66%, down from 9.95% at the series start and just above the 8.59% series low.
Lowest since May 2026 (8.6% then), the softest 12-month reading of the current disinflation.
MPC: with 12-month inflation drifting down and a positive real rate, expect a hold at the next MPS.
WATCH
- ◆The August point-to-point CPI for whether food disinflation holds
- ◆September private-credit growth for a break above 5%
RISK
- ▼M2 at a five-year high feeding back into inflation
- ▼Credit below 5% signalling weak private investment into H2
Remittance
August remittance flash at $2.97bn, roughly 23% above a year ago.
Remittance Inflow
Monthly remittances printed $2,859mn in Jul 2026, up from $2,422mn a year earlier; the 12-month range peaked at $3,755mn.
Up 18% on the $2,422mn of a year earlier (Aug 2025 series start), well off the $3,755mn peak.
Treasury: steady remittance inflow underpins reserves and taka stability; watch the August final print for confirmation.
WATCH
- ◆The final August remittance revision against the $2.97bn flash
- ◆Whether the run-rate holds above $2.8bn into September
RISK
- ▼A flash revision lower trimming the external cushion
- ▼A seasonal fade after the post-festival months
Fiscal
NBR at BDT 4.15tn YTD; government bank borrowing steady on the June print.
NBR Tax Revenue
Monthly NBR revenue printed BDT 28,027 crore in Oct 2025, up from BDT 26,555 crore a year earlier; the series has peaked at BDT 52,720 crore.
Latest plotted month Oct 2025, up 5.5% on Oct 2024's BDT 26,555 crore.
Fiscal: a mid-single-digit YoY revenue gain leaves the budget leaning on bank borrowing to close the gap.
WATCH
- ◆A September NBR update to confirm the collection pace
- ◆The next government bank-borrowing figure, last a June print
RISK
- ▼A borrowing acceleration in H2 draining bank liquidity
- ▼A revenue shortfall against budget widening the financing gap
Iran War & Oil
Brent at $105.83, well up from June lows; import-bill pressure persists.
Brent Crude
Brent climbed to $105.83 by the 16 Sep print from $79.24 when the series began on 19 Jun, a rise of roughly 34%.
Just below the $108.35 peak of the run and well above the $71.18 low, all since mid-June 2026.
Risk: oil near cycle highs sustains import costs; watch H2 energy-importer credit lines and dollar demand.
WATCH
- ◆Brent holding above $100 into the next refinancing cycle
- ◆Fuel-oil import tenders adding to dollar demand
RISK
- ▼A sustained $100+ Brent widening the trade gap and pressuring the taka
- ▼Energy-importer receivables slipping to 60–90 days past due on the next refinancing cycle
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