Headlines
Excess deposits meet thin lending outlets as fuel costs reignite the price story.
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; overnight cash trades soft as liquidity stays ample.
FX Reserves
Gross reserves rose to $37.35bn by the Aug 2026 print, up from $33.19bn in Dec 2025 — a $4.2bn rebuild since December.
Just below the series peak of $37.58bn; net reserves at $32.44bn on the same Aug print.
Treasury: a thicker reserve buffer underwrites import cover and eases FX-intervention pressure; watch whether the Sep print extends the build.
WATCH
- ◆Overnight call money holding below the 9.50% repo
- ◆The next MPS for any corridor shift
- ◆Reserve trajectory after the Aug $37.35bn print
RISK
- ▼A liquidity glut compressing deposit-lending spreads
- ▼The reserve build reversing if the import bill reaccelerates
Banking
Asset quality stressed at 32.78% NPL; capital read a year stale.
Overnight Money Market
Overnight rates eased to 8.80% (DOMMR) and 8.73% (BOFR) by the 20 Sep print, both down from above 10% in mid-April 2026.
Both sit near their series lows since mid-April 2026 — DOMMR 8.67%, BOFR 8.68% troughs.
ALCO: cheap overnight cash eases funding costs but compresses deposit spreads; the solvency question sits with capital, not liquidity.
WATCH
- ◆The Q3 2026 NPL print for direction off 32.78%
- ◆Provisioning coverage at the state-owned commercial banks
- ◆Any recapitalisation of the state banks
RISK
- ▼Rising NPLs eroding an already thin capital base
- ▼A year-old CAR read masking current capital stress
- ▼Provisioning shortfalls forcing fresh capital calls
The system NPL ratio held at 32.78% on the Q2 2026 print, close to a third of all loans, reflecting the reclassification drive rather than a fresh wave of defaults. Most of that stock sits with a few state-owned commercial banks, concentrating tail risk in balance sheets the state backstops. Capital adequacy is the missing half — the latest read is the Q3 2025 print, now a year old, so current loss-absorbing capacity cannot be marked against the recognised bad loans. Overnight funding tells a calmer story: DOMMR (Dhaka Overnight Money Market Rate) and BOFR (Bangladesh Overnight Financing Rate) eased to 8.80% and 8.73% by 20 Sep from above 10% in April, so liquidity is not the pressure point. The strain is solvency and provisioning at named institutions, not system cash; keep credit lines tilted to healthier private banks until fresh capital data lands.
FX & External
Reserves rebuilding to $37.35bn; the taka steady, trade data still June.
External Flow Balance
Monthly imports climbed to $7.51bn by the Jun 2026 print — the series high — while exports were $4.20bn, widening the goods gap.
Exports up from $3.35bn a year earlier (Jun 2025); imports rose from $4.39bn over the same span.
Treasury: import demand well above exports keeps the current account reliant on remittance and reserve support; watch the Jul-Aug trade refresh.
WATCH
- ◆Whether reserves extend past $37.35bn in the Sep print
- ◆USD/BDT 122.80 stability at the managed level
- ◆The Jul-Aug export refresh off the $4.20bn Jun read
RISK
- ▼The import bill reaccelerating and draining the reserve build
- ▼The trade gap widening beyond the $3.31bn Jun level
- ▼Gold at $4,424/oz signalling global risk-off spillover
Gross reserves stood at $37.35bn in the Aug 2026 print, a rebuild of roughly $4.2bn from the $33.19bn low of Dec 2025, with net reserves at $32.44bn on the same date. That build is the counterpart to the remittance story — strong worker inflows near $2.97bn in the Aug flash are the main line feeding the stack while export data lags. The taka has held at USD/BDT 122.80, so Bangladesh Bank is not spending the buffer to defend the rate. The external squeeze that framed the spring has eased on the reserve line, but trade is still read off Jun 2026 — $4.20bn of exports against a $3.31bn goods deficit — so the picture partly rests on three-month-old shipment data. Import cover sits near 5.0 months. The runway has lengthened; keep FX-funded lines comfortable but do not extrapolate the reserve build past the next import print.
DSE Markets
Broad rally: DSEX +1.09% to 5,592 on 287 advancers.
DSEX Index
DSEX at 5,592.21 on the 20 Sep print, up 3.9% over the year from 5,381.85, below the 5,926.28 high.
A year ago (21 Sep 2025) the index was 5,381.85; the 52-week range runs 4,702.69 to 5,926.28.
Equity desk: the rally tracks the liquidity glut and falling yields; watch turnover for conviction before adding beta.
WATCH
- ◆Whether DSEX holds above 5,500 after the 20 Sep close
- ◆Turnover sustaining aboveBDT 700cr
- ◆Breadth staying positive (287 up / 62 down)
RISK
- ▼A liquidity-driven rally reversing if yields back up
- ▼Thin turnover leaving the index vulnerable to profit-taking
T-Bonds & T-Bills
Yields fell across the curve; T-Bill cut-offs near 8.4%.
BD Govt Yield Ladder
The 364d T-Bill yield fell to 8.42% by the Sep 2026 print from 10.09% in Jul — a 167bp drop across the quarter.
The 10y fell in step, 10.24% in Jul to 8.54% by the Sep print — a broad curve rally.
Treasury: lower cut-offs cheapen government funding and lift bond-book valuations; watch duration if inflation prints stall the rally.
WATCH
- ◆The next T-Bill auction for continuation below 8.34%
- ◆The 10y at 8.54% as the curve's long anchor
- ◆Whether the rally outruns the inflation path
RISK
- ▼A yield round-trip if inflation prints re-accelerate
- ▼Duration risk on bond books if the rally reverses
- ▼ALM (Asset-Liability Management) mismatch as rates fall on floating-rate loans
Macro & Inflation
Headline CPI easing to 8.66%; non-food sticky, money growth fastest since 2021.
CPI Trend
The 12-month average CPI eased to 8.66% by the Jul 2026 print, down from 9.77% a year earlier and a 10.34% peak.
Lowest since May 2026 (8.6% then); the series has fallen from a 10.34% high in this window.
Treasury: with headline disinflation intact and the real policy rate positive at 1.24%, expect the MPC to hold at the next MPS.
WATCH
- ◆The Aug CPI point-to-point for the food/non-food split
- ◆Private credit off the 4.98% Aug read
- ◆M2 at 11.76% versus deposit-to-credit transmission
RISK
- ▼Non-food inflation at 9.28% keeping core sticky
- ▼Weak private credit signalling soft investment demand
- ▼REER at 102.78 on the Mar read eroding export competitiveness
Remittance
Remittance at $2.97bn on the Aug flash, up 23% year on year.
Remittance Inflow
Monthly remittance was $2.86bn as of the Jul 2026 print, up from $2.42bn a year earlier, within a $2.42-$3.76bn range.
A year ago (Aug 2025) monthly inflows were $2.42bn; the series peaked at $3.76bn within the window.
Treasury: remittance above $2.8bn a month underwrites the reserve build and the taka peg; watch the Sep flash for momentum.
WATCH
- ◆Whether the Aug $2.97bn flash confirms on final data
- ◆The Sep remittance print for continued momentum
- ◆Remittance-to-reserve pass-through as the main FX inflow
RISK
- ▼A flash figure revised lower on final BB data
- ▼Seasonality fading after the mid-year peak
- ▼Reliance on remittance if exports stay soft
Worker remittances ran at $2.97bn in the Aug 2026 flash, up roughly 23% from the $2.42bn of Aug 2025 and above the $2.86bn confirmed for July. These inflows are now the primary channel rebuilding reserves, which reached $37.35bn in the Aug print from $33.19bn last December, and they carry more of the external-balance load than exports while trade data still reads off June. That mix — strong remittance, a stable taka at USD/BDT 122.80, and reserves near a series high — keeps import cover close to five months and the FX runway open. Remittance is the swing variable: while it holds near $3bn a month, Bangladesh Bank can keep the taka steady without drawing the buffer. Position FX-funded lines for continuity, but treat the Aug flash as provisional until the final print confirms.
Fiscal
Revenue soft at BDT 4.15tn YTD; borrowing cheaper as yields fall.
NBR Tax Revenue
Monthly NBR tax revenue was BDT 28,027cr in the Oct 2025 print, up from BDT 26,555cr a year earlier and BDT 22,005cr in Jul 2023.
The series ranges BDT 21,478cr to a BDT 52,720cr peak; the Oct 2025 read sits in the lower half.
Fiscal: monthly collection well below the series peak keeps the deficit reliant on bank borrowing; watch the FY revenue run-rate.
WATCH
- ◆The next NBR monthly revenue print off BDT 4.15tn YTD
- ◆Government bank borrowing beyond the BDT 0.94tn Jun read
- ◆Cheaper T-Bill funding easing the deficit cost
RISK
- ▼A revenue shortfall widening the deficit-financing gap
- ▼Heavier government bank borrowing crowding out private credit
- ▼Weak collection pace against the FY target
Iran War & Oil
Brent near $99, keeping the import bill and fuel prices elevated.
Brent Crude
Brent stood at $99.29/bbl as of the 18 Sep print, up from $78.25 in late June, within a $71-$108 range this quarter.
Crude has round-tripped this quarter — a $71.18 low and a $108.35 high — settling near $99 by mid-September.
Credit/risk: oil near $100 keeps the import bill and CPI path elevated; watch H2 receivables on energy-linked lines if crude holds.
WATCH
- ◆Brent holding near $99 versus the $108 recent high
- ◆The domestic fuel-price pass-through into the next CPI print
- ◆Import-bill sensitivity if crude breaks $100
RISK
- ▼Oil above $100 widening the import bill and denting reserves
- ▼Fuel-price hikes reviving non-food inflation
- ▼A supply shock spiking Brent past the $108 recent high
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