Headlines
Rates dominate the week's news; policy easing and asset-quality strain persist.
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)
Rate corridor held all week while market rates drifted lower.
FX Reserves
Gross reserves reached $37.35bn on the Aug 2026 print, up from $33.19bn in Dec 2025 — a $4.16bn build over nine months.
Near the window high of $37.58bn; net reserves stood at $32.44bn on the same Aug 2026 point.
Treasury: the reserve build eases near-term FX intervention pressure; import cover holds near five months.
WATCH
- ◆Next MPS for any shift in the 9.50% policy stance
- ◆Whether call money holds below 9% into month-end
- ◆A reserve refresh beyond the Aug 2026 $37.35bn read
RISK
- ▼Liquidity surplus masking weak credit demand
- ▼Reserve cover resting on an Aug 2026 print
Banking
No new prints, but asset-quality strain hardened over the week.
Overnight Money Market
The overnight interbank rate eased to 8.71% by the 17 Sep session from 10.09% in mid-Apr 2026, near its 8.67% window low.
Window low is 8.67%, within touching distance of the latest 8.71% read; the range topped 10.65% in spring.
Treasury: wholesale funding near cycle lows supports margins but signals ample liquidity, not tight policy transmission.
WATCH
- ◆Citygroup rescue plan due by month-end per BB
- ◆Whether a fresh CAR print lands beyond the Q3 2025 read
- ◆Deposit repricing lag as interbank rates fall
RISK
- ▼Capital adequacy on a 353-day-old Q3 2025 read
- ▼NPL stock near a third of loans on Q2 2026 data
- ▼Provisioning gap if classification tightens further
The banking section carried no new prints this week, but the setup hardened. Gross NPLs stood at 32.78% on the Q2 2026 data — a stock near a third of loans — while the latest capital reading, CAR at 1.56%, dates to Q3 2025 and is now 353 days old. The week's rate move cuts both ways: DOMMR (Dhaka Overnight Money Market Rate) eased to 8.71% by the 17 Sep session from above 10% in April, which lowers wholesale funding costs and supports net interest margins, but cheaper money does nothing for the impaired-asset stock. BB's push for a Citygroup rescue plan by month-end is the near-term signal to watch. The desk position: assume capital headroom is thinner than the stale print shows and price counterparty risk on the weakest state-owned commercial banks accordingly.
FX & External
External accounts held shape without improving; trade gap stays wide.
External Flow Balance
Exports were $4.20bn in Jun 2026, up from $3.35bn a year earlier; imports hit $7.51bn, the 24-month high, widening the monthly gap.
Imports at their 24-month peak of $7.51bn (Jun 2026); exports still below the $4.78bn window high.
Treasury: import bill outpacing export receipts pressures the current account; watch reserve drawdown into H2.
WATCH
- ◆July export and import prints to update the June gap
- ◆USD/BDT for any drift beyond 123
- ◆A reserve refresh beyond the Aug 2026 read
RISK
- ▼Import bill inflated by Brent near $104
- ▼Trade gap of $3.31bn on June data
- ▼Reserve cover resting on a monthly print
DSE Markets
Equities recovered through the week to close firmly higher.
DSEX Index
DSEX closed at 5,532 on the 17 Sep session, up from 5,450 a year earlier — a 1.5% annual gain, well off the 5,926 window peak.
The year's range ran from a 4,703 trough to a 5,926 peak; the index now sits mid-band.
Risk: still 6.6% below the 5,926 window high; a range-bound tape favours selective, not broad, exposure.
WATCH
- ◆Whether turnover confirms the rally above BDT 700cr
- ◆DSEX resistance near the 5,926 window high
- ◆Breadth durability into next week's open
RISK
- ▼Thin turnover leaving the rally liquidity-driven
- ▼Index still 6.6% below its 5,926 window high
T-Bonds & T-Bills
Sovereign yields fell hard at the 14 Sep auction.
BD Govt Yield Ladder
Yields fell across the curve — 10y to 8.54% (Sep 2026) from 10.24% in Jul; 364d T-bill to 8.42% from 10.09%.
Every plotted tenor sits at its three-month window low, from the 91d at 8.34% to the 20y at 9.13%.
Treasury: a ~170bp curve rally since July lifts bond marks; extend duration before the next auction repeats it.
WATCH
- ◆Next T-bill auction for whether cut-offs keep falling
- ◆10y bond at 8.54% for confirmation of the long-end rally
- ◆Government borrowing pace into H2 for supply pressure
RISK
- ▼Reinvestment yields compressing carry on new money
- ▼A liquidity reversal if H2 borrowing accelerates
- ▼Reversal risk if Brent forces FX tightening
The 14 Sep auction was the week's most consequential print. Cut-offs fell across the T-bill curve — the 91d to 8.34%, the 182d to 8.38%, the 364d to 8.42%, drops of 25 to 31bp — extending a rally that has taken yields down roughly 170bp since July, when the 10y sat at 10.24% against 8.54% now. The mechanism is liquidity: interbank rates near 8.71% and call money at 8.81% leave banks with cash to place, and the sovereign is funding cheaply into that surplus. For the book, existing holdings are marking up, but the reinvestment yield on maturing paper is compressing, squeezing forward carry. The desk position: extend duration to lock yield before the next auction repeats the move, while sizing for a reversal if H2 government borrowing lifts supply or Brent near $104 forces a tighter FX stance.
Macro & Inflation
Disinflation stalled near 8.6% while money growth hit a 2021 high.
CPI Trend
The 12-month-average CPI eased to 8.66% on the Jul 2026 plot from 9.95% in Aug 2024; food p2p 8.6%, non-food 9.61% on Jun 2026 points.
Lowest since May 2026 (8.6% then); the two-year series floor was 8.59%.
Treasury: disinflation stalling near 8.6%; real policy rate only +1.24%, so expect MPC to hold at the next MPS.
WATCH
- ◆August CPI detail for the 12-month average near 8.6%
- ◆M2 trajectory after its highest reading since 2021
- ◆REER (Real Effective Exchange Rate) refresh beyond the Mar 2026 print
RISK
- ▼Monetary growth at 11.76%, fastest since 2021
- ▼Real policy rate thin at +1.24%
- ▼Non-food CPI sticky at 9.28% on July data
Remittance
Remittance stayed the reliable external cushion at flash-print highs.
Remittance Inflow
Monthly remittance was $2,858.68mn on the Jul 2026 plot, up from the $2,421.9mn window low a year earlier.
Below the $3,755.1mn window peak reached earlier in the series.
Treasury: remittance inflow cushions the current account against the wide June trade gap; supports reserve stability.
WATCH
- ◆Confirmed August remittance beyond the flash read
- ◆Whether inflows hold above $2.8bn next month
- ◆Festival-cycle seasonality into Q4
RISK
- ▼August figure still provisional
- ▼Inflow reliance to offset the $3.31bn June trade gap
Fiscal
Fiscal data stood still; revenue and borrowing figures unchanged.
NBR Tax Revenue
Monthly NBR revenue was BDT 28,027cr in the Oct 2025 print, up from BDT 26,555cr a year earlier — a 5.5% YoY gain.
Well below the BDT 52,720cr window peak; the series floor was BDT 21,478cr.
Credit: soft revenue growth keeps deficit financing tilted to bank borrowing; watch T-bill supply into H2.
WATCH
- ◆Fresh monthly NBR revenue beyond the Oct 2025 chart point
- ◆A government borrowing print beyond the June 2026 read
- ◆T-bill supply as the deficit-financing channel
RISK
- ▼Soft revenue growth tilting financing to bank borrowing
- ▼Borrowing data resting on a June 2026 print
Iran War & Oil
Brent held near $104 all week, close to its cycle high.
Brent Crude
Brent stood at $104.11/bbl on the 17 Sep plot, up from $80.59 in late Jun 2026 and near the $108.35 window high.
Off the $71.18 window trough set in early summer — a swing of about $33 across the quarter.
Credit: at ~$104 Brent, energy-importer lines strain; watch 60-90 Days Past Due (DPD) on the next refi cycle.
WATCH
- ◆Brent for any break above the $108.35 cycle high
- ◆Pass-through into the next non-food CPI print
- ◆Energy-importer credit line drawdowns
RISK
- ▼Import bill inflated while Brent holds near $104
- ▼Non-food inflation transmission at 9.28%
- ▼Reserve pressure if oil stays elevated into H2
Brent has run from $80.59 in late June to $104.11 now, a climb of roughly 30% that leaves it within touching distance of its $108.35 cycle high. For Bangladesh the transmission is direct: the import bill was already $7.51bn in June — a two-year high — and sustained oil above $100 keeps it there, draining the current account and pressuring the $37.35bn reserve stock. It also feeds non-food inflation, still 9.28% on July data, which is precisely the component keeping the 12-month average from falling below 8.6%. For the desk, energy-importer and fuel-trading credit lines face rising working-capital needs and refinancing risk; watch receivables aging on the next cycle. The position: stress energy-exposed books to Brent above $108 and treat the recent yield rally as vulnerable if oil forces BB toward FX tightening.
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