Headlines
Fuel hike ripples through prices; watch the consumption and inflation read.
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)
Rates on hold; ample liquidity keeps the short end anchored.
FX Reserves
Gross reserves rose to $37.35bn by the Aug 2026 print from $33.19bn last December, holding just below the $37.58bn series peak.
From the Dec 2025 low of $33.19bn to the Aug 2026 print, an eight-month external-buffer rebuild.
Treasury: a wider reserve buffer supports the taka and gives BB room to keep the short end easy.
WATCH
- ◆MPS signalling on whether the 30 Jul cut extends
- ◆call money drift toward the 7.5% SDF floor
- ◆the next monthly reserves print after Aug's $37.35bn
RISK
- ▼a fuel-price-driven inflation impulse arresting the easing path
- ▼reserve build reversing if the import bill re-accelerates
Banking
Impairment stock concentrated in state banks; provisioning gap keeps tail risk high.
Overnight Money Market
DOMMR eased to 8.90% and BOFR to 8.97% by the 22 Sep read, both down from above 10% in mid-April as money-market rates tracked policy lower.
From the mid-April high above 10% (10.65% DOMMR peak) to the 22 Sep read, a five-month grind lower.
Treasury: cheap overnight funding persists; the credit constraint is asset quality, not liquidity, so watch provisioning not the call rate.
WATCH
- ◆the Q3 2026 NPL print for direction off 32.78%
- ◆an updated CAR to replace the Q3 2025 read
- ◆provisioning-shortfall disclosures at the state banks
RISK
- ▼tail risk concentrated in a few state-owned balance sheets
- ▼a fresh CAR print confirming thin capital against the impairment stock
- ▼cheap funding masking underlying credit stress
The banking system carries two problems on different clocks. The impairment stock is current and large: NPLs at 32.78% for Q2 2026 mean close to a third of loans are not performing, concentrated in a small set of state-owned commercial banks that hold most of the system's tail risk. The capital meant to absorb it is measured only to Q3 2025, when CAR read 1.56%, so the desk prices solvency off a figure a year stale. The money market, by contrast, has eased — DOMMR (Dhaka Overnight Money Market Rate) fell to 8.90% on 22 Sep from 10.09% in mid-April, BOFR (Bangladesh Overnight Financing Rate) to 8.97% — so funding is cheap and liquidity is not the binding constraint. Credit quality and the provisioning gap are. Weight state-bank counterparty limits on impairment and coverage, not on a capital ratio that predates the current NPL picture.
FX & External
Taka anchored at 122.83; reserve build offsets a still-wide trade gap.
External Flow Balance
Exports reached $4.20bn in the Jun 2026 print, up from $3.35bn a year earlier, while imports ran $7.51bn — the gap the widest in the window.
Imports at $7.51bn are the window high (from $4.39bn in Jun 2025); exports up 25% year on year.
Treasury: the goods gap leans on remittance and reserves; watch the Jul import print for whether $7.51bn is a run-rate or a one-off.
WATCH
- ◆the Jul–Aug export prints to confirm the $4.20bn Jun run-rate
- ◆remittance sustaining above the trade gap
- ◆USD/BDT drift off 122.83
RISK
- ▼a re-widening trade gap if the import bill climbs past $7.51bn
- ▼Brent near $99 lifting the energy import line
- ▼the reserve build stalling
DSE Markets
Large-caps mask a soft tape; breadth and turnover flag caution.
DSEX Index
DSEX at 5,540.32 is up just 3.6% over the year from 5,347.47, and sits well below the 5,926 window high after fading from recent gains.
This is a 3-session low (5,532.15 on 17 Sep the last lower close), off a 5,926 peak in the window.
Equity desk: a year of flat returns and thin turnover argues for stock selection over index beta until breadth and volume confirm a trend.
WATCH
- ◆turnover recovering above the BDT 791 crore level
- ◆breadth turning positive off 103/227
- ◆whether falling yields start rotating cash into equities
RISK
- ▼fuel-price inflation denting consumer and margin outlooks
- ▼thin liquidity amplifying any drawdown
- ▼the 28 Sep compensation payout shifting retail sentiment
The equity market is sending a divergence worth reading. DSEX closed at 5,540.32, a 3-session low, but the index masks its internals: 227 stocks fell against 103 that rose, and BDT 791 crore of turnover is thin, so a few large-caps hold the headline while the broad tape leaks lower. The backdrop should be supportive — T-bill cut-offs have fallen roughly 150bp since July and the 10-year bond sits at 8.54%, which lowers the discount rate on equity cash flows and would normally rotate money out of fixed income into stocks. That rotation is absent. The likely reason is the fresh fuel-price hike, which threatens to reheat inflation and squeeze consumption just as disinflation had opened room to cut. Until turnover confirms real buying, the desk should read index prints as large-cap-driven and stay neutral rather than chase a rate-driven re-rating that flows have not endorsed.
T-Bonds & T-Bills
Curve has repriced ~150bp lower since July; short end leads.
BD Govt Yield Ladder
The 10-year yield fell to 8.54% by the Sep 2026 point from 10.24% in July, a ~170bp drop; the 364-day T-Bill likewise eased to 8.47%.
From the Jul 2026 highs (10.24% on the 10-year) to the Sep 2026 point, a uniform three-month decline.
Treasury: mark-to-market gains on fixed-rate holdings; watch whether the fuel-price impulse halts the decline before adding duration at these levels.
WATCH
- ◆the next 91d/182d/364d auction cut-offs off 8.32/8.45/8.47%
- ◆an updated 5y print to replace the 9 Sep read
- ◆whether the fuel-price impulse arrests the yield decline
RISK
- ▼a fuel-price inflation impulse reversing the yield fall
- ▼duration exposure if the curve backs up from these lows
- ▼auction cut-offs re-steepening as issuance rises
The rates story is the cleanest signal in this issue. Across tenors the government curve has fallen roughly 150bp since the summer: the 91-day T-Bill is 8.32%, the 364-day 8.47%, and the 10-year 8.54%, against July readings near 9.8%, 10.1% and 10.2%. The move tracks looser funding markets — call money at 8.88% and overnight rates back below 9% — rather than a formal cut, since the repo has held at 9.5% since 30 Jul. For a bank treasury this lifts the mark on existing fixed-rate holdings, a tailwind to the available-for-sale book, while compressing carry on new T-bill purchases. The risk is inflation: the fuel-price hike now working through prices could halt the disinflation that let yields fall, so adding duration at 8.5% locks a thin cushion against a back-up. The desk should bank the mark-to-market gain and be selective on new duration here.
Macro & Inflation
Disinflation slow; private credit under 5% while M2 runs near 12%.
CPI Trend
The 12-month average CPI eased to 8.66% by the Jul 2026 point from 9.95% in 2024; food inflation fell to 8.6% off a 13.8% high.
The 8.66% headline is the lowest since May 2026 (8.6% then), just above the 8.59% series floor.
Credit desk: disinflation is real but slow; the fuel-price hike is the swing factor for whether the easing in rates can continue.
WATCH
- ◆the Sep CPI print for whether disinflation survives the fuel hike
- ◆private credit turning up off 4.98%
- ◆M2 growth off the 11.76% multi-year high
RISK
- ▼the fuel-price hike re-accelerating food and non-food CPI
- ▼public-sector money growth crowding private credit
- ▼REER dearness weighing on export competitiveness
Remittance
Inflows resilient near $2.97bn; a steady offset to the trade gap.
Remittance Inflow
Monthly remittance ran $2,858.68mn at the Jul 2026 point, up from $2,421.9mn a year earlier, off a $3,755.1mn window high.
The Jul 2026 point of $2,858.68mn is up from the $2,421.9mn low a year earlier, below the $3,755.1mn window peak.
Treasury: remittance remains the key funding line closing the trade gap; watch the final Aug print to confirm the flash near $3bn.
WATCH
- ◆confirmation of the $2.97bn Aug flash in the final print
- ◆remittance sustaining above the trade gap
- ◆seasonal effects on the run-rate
RISK
- ▼a pullback in inflows re-exposing the trade gap
- ▼informal-channel leakage if the spread widens
- ▼base effects flattering the year-on-year
Fiscal
NBR collection stalled at Tk4.15tn; the state leans on bank credit.
NBR Tax Revenue
Monthly NBR tax revenue read BDT 28,027 crore in Oct 2025, up from BDT 26,555 crore a year earlier, below the BDT 52,720 crore peak.
The Oct 2025 point sits well below the BDT 52,720 crore window high and above the BDT 21,478 crore low.
Fiscal desk: a soft revenue run-rate keeps government bank borrowing elevated; watch T-bill supply and the pull on system deposits.
WATCH
- ◆the next NBR YTD update off BDT 4.15tn
- ◆an Aug/Sep govt-borrowing print to replace the Jun read
- ◆T-bill issuance volumes as the funding channel
RISK
- ▼a revenue undershoot widening the deficit and bank borrowing
- ▼crowding out of private credit already growing under 5%
- ▼issuance pressure re-steepening the curve
Iran War & Oil
Crude's climb toward $100 feeds straight into fuel and inflation.
Brent Crude
Brent climbed to $99.20 by the 22 Sep point from $73.11 in late June, a 36% rise, after peaking near $108.35 in the window.
From the $73.11 late-June low to the 22 Sep point, crude has climbed toward the $108.35 window high.
Treasury/credit: a $99 Brent keeps the energy import line and fuel-driven inflation elevated; watch receivables at energy-intensive borrowers on the next refi.
WATCH
- ◆Brent holding above or below $100 into the next refi cycle
- ◆pass-through of the fuel-price hike into Sep CPI
- ◆energy import-line pressure on the trade gap
RISK
- ▼a further crude spike widening the import bill and reserves drain
- ▼second-round fuel-price effects on non-food CPI
- ▼margin pressure on energy-intensive borrowers
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