Headlines
BB holds at 9.5% and stays contractionary into December; equities drift lower.
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)
Held at 9.5%; contractionary into December — funding easing, reserves rebuilt.
FX Reserves
Gross reserves rose to $37.35bn as of the Aug 2026 print, up from $33.19bn in Dec 2025 and near the $37.58bn series high.
Net reserves (BPM6) at $32.44bn on the same Aug 2026 print, up from $28.59bn in Dec 2025.
Treasury: rebuilt buffer eases rollover pressure; watch whether the Aug pace holds into Q4.
WATCH
- ◆Whether the contractionary stance holds through the December review
- ◆Energy-price pass-through into the next CPI print
- ◆Call money drift toward the 11.0% SLF ceiling
RISK
- ▼Reserve build reverses if import demand accelerates into Q4
- ▼Sticky non-food inflation forcing the corridor wider
- ▼Government borrowing crowding the interbank market
BB left the repo at 9.5% on 23 Sep and reaffirmed a contractionary stance into December, holding the SDF at 7.5% and the SLF at 11.0%. The signal to the desk is that the policy floor is set for the quarter: overnight call money at 8.85% trades closer to the SDF floor than the SLF ceiling, which says the interbank market has cash and is not being pushed to the window. That easing in short funding shows further out the curve, where T-bill cut-offs have dropped from near 10% in July to the low-8s. For the equity desk, a rate structure that has stopped rising while funding costs drift lower is the more supportive backdrop, even with the index soft. The risk to that read is energy-price pass-through: if the next CPI print re-accelerates, the December review turns live and the fall in yields stalls.
Banking
NPLs at 32.78% on Q2 data; capital read a year stale.
Overnight Money Market
The overnight money-market rate eased to 8.88% by the 23 Sep print, down from 10.09% in mid-April.
The overnight financing rate fell in step to 8.99% from 10.42% since mid-April.
Treasury: overnight funding cheap and stable near the SDF floor, supportive for banks carrying stressed asset books.
WATCH
- ◆Q3 2026 NPL disclosure and any provisioning top-ups
- ◆Whether SCB recapitalisation moves before the December review
- ◆CAR refresh — the last print is Q3 2025
RISK
- ▼Bad-loan stock concentrated in a few state-owned banks
- ▼Thin capital headroom against a 32.78% NPL ratio
- ▼Provisioning shortfall widening if recoveries stay slow
The Q2 2026 print leaves the NPL ratio at 32.78%, and the story behind it has not changed: the bulk of the stressed stock sits on a handful of state-owned balance sheets, which concentrates the system's tail risk rather than spreading it. The capital read is a year old — CAR was last published at 1.56% for Q3 2025 — so the desk gauges the cushion behind a very current problem with a stale measure. The one live signal is funding: the overnight money-market rate (DOMMR) has eased to 8.88% and the overnight financing rate (BOFR) to 8.99% by the 23 Sep print, both down from above 10% in April. Cheaper funding lowers the cost of carrying bad loans but does not repair capital; price exposure to the state-owned lenders on capital and recovery, not on the funding relief.
FX & External
Taka steady at 122.99; reserves firm, but trade data three months old.
External Flow Balance
Exports reached $4.20bn in the Jun 2026 print, up from $3.35bn a year earlier; imports ran hotter at $7.51bn, a series high.
Import bill at its highest in the 24-month series as of the Jun 2026 print.
Treasury: the trade gap keeps drawing on reserves; remittance at $2.86bn (Jul) is the offset to watch.
WATCH
- ◆July-August trade data to confirm the June gap
- ◆Remittance pace after the $2.86bn July print
- ◆Reserve trajectory into the Q4 import season
RISK
- ▼Import bill at a series high pressuring the trade gap
- ▼Reserve build reversing if remittance softens
- ▼Gold at $4,328/oz lifting bullion-linked import demand
DSE Markets
Soft at a 3-session low on thin turnover; rates tailwind unconfirmed.
DSEX Index
DSEX closed at 5,540.32 on the 22 Sep print, up 2.7% over the year from 5,392.65 but off the 5,926.28 high set within the window.
The 22 Sep close marks a 3-session low (5,532.15 on 17 Sep the last lower close).
Equity desk: soft breadth and thin turnover argue for patience; falling yields are the offsetting tailwind to watch.
WATCH
- ◆Whether turnover recovers above the BDT 800 crore mark
- ◆Breadth — 227 decliners on 22 Sep signals broad softness
- ◆Pass-through of easing yields into equity valuations
RISK
- ▼Thin turnover leaving the index vulnerable to small orders
- ▼Breadth weakness spreading beyond large caps
- ▼Sentiment drag from the December contractionary signal
The equity tape is soft but not stressed: DSEX closed at 5,540.32 on 22 Sep, a 3-session low, with 227 stocks down against 103 up and turnover of just BDT 791 crore. The 0.18% slip came on light volume, which reads as disengagement rather than distribution. Underneath sits a friendlier rates picture: BB has held the repo at 9.5% and T-bill cut-offs have fallen from near 10% in July to the low-8s, so the risk-free rate competing with equities is lower than a quarter ago. That gap usually pulls money toward stocks, yet the index is up only 2.7% over the year and range-bound below 5,926. The block is the December signal — with policy flagged contractionary into year-end, the market will not yet price the yield relief as durable. The desk stays selective until participation confirms the re-rating.
T-Bonds & T-Bills
Curve repriced to the low-8s from July's near-10%; flat and low.
BD Govt Yield Ladder
The 364d T-bill cut-off fell to 8.47% as of the Sep 2026 print, down from 10.09% in July; the 10y eased to 8.54% from 10.24%.
Across the strip the fall runs from July to the Sep 2026 print, roughly 160bp on the year benchmark.
Treasury: the whole curve has repriced lower; mark floating and swap-linked books to the new 8.5% area, not July's 10%.
WATCH
- ◆Next T-bill auction for confirmation of the 8.3-8.5% band
- ◆Whether the long end refreshes lower toward the T-bill strip
- ◆Duration demand as yields stabilise
RISK
- ▼Yield back-up if the December CPI print re-accelerates
- ▼Duration marks reversing on any inflation surprise
- ▼Thin secondary liquidity at the long end
Macro & Inflation
12m CPI eased to 8.66% on August data; disinflation slow, real rate thin.
CPI Trend
The 12-month average CPI eased to 8.66% by the Jul 2026 print, down from 9.77% a year earlier and off the 10.34% series high.
The 8.66% reading is the lowest since May 2026 (8.6% then).
ALCO: disinflation is slow — 12m-avg still near 8.7%, real policy rate only 1.24%; expect the corridor to stay put.
WATCH
- ◆August CPI detail and the September print for the disinflation path
- ◆Non-food inflation stuck near 9.28% on July data
- ◆REER (Real Effective Exchange Rate) refresh — the last read is March 2026
RISK
- ▼Energy-price pass-through reversing the CPI decline
- ▼Real policy rate too thin to absorb an inflation surprise
- ▼M2 growth at 11.76% feeding demand-side pressure
Remittance
August flash at $2.97bn; the steady offset to the trade gap holds.
Remittance Inflow
Monthly remittance was $2.86bn in the Jul 2026 print, up from $2.42bn a year earlier; the 12-month range runs $2.42-3.76bn.
The Jul 2026 read sits mid-range, up 18% on the same month a year earlier.
FX: remittance is the steady offset to the trade gap; an August flash of $2.97bn keeps the inflow firm.
WATCH
- ◆Confirmation of the August flash at $2.97bn
- ◆Whether the festival-season inflow holds into Q4
- ◆Channel mix — formal vs informal after rate moves
RISK
- ▼Flash figure revised down on confirmation
- ▼Inflow softening as overseas job markets tighten
- ▼Widening trade gap outpacing the remittance offset
Fiscal
Collection flat near BDT 4.15tn; deficit financing leans on banks.
NBR Tax Revenue
Monthly NBR revenue was BDT 28,027 crore in the Oct 2025 print, up from BDT 26,555 crore a year earlier — a 5.5% YoY gain.
The Oct 2025 reading sits well below the series peak of BDT 52,720 crore.
Fiscal: collection momentum is modest against a rising borrowing need; watch monthly prints for a Q2 pickup.
WATCH
- ◆Monthly NBR prints for momentum above BDT 28,000 crore
- ◆Government bank borrowing refresh beyond the June read
- ◆Revenue-target gap heading into H2 FY26
RISK
- ▼Revenue undershoot widening the bank-financed deficit
- ▼Crowding-out of private credit if borrowing accelerates
- ▼Reliance on the banking system for deficit financing
Iran War & Oil
Brent near $98 on 24 Sep; import-bill and inflation pressure stays on.
Brent Crude
Brent stood at $98.32 as of the 23 Sep print, up from $75.06 in late June and off the $108.35 peak reached within the run.
The range since late June runs $71.18 to $108.35, with the latest near the top third.
Credit: Brent near $98 keeps the import bill elevated; watch energy-line receivables at 60-90 days past due on the next refi.
WATCH
- ◆Brent's path back toward the $108 peak
- ◆Fuel-import bill pressure into Q4
- ◆Pass-through to the next non-food CPI print
RISK
- ▼Oil spike widening the trade gap and import bill
- ▼Energy-price pass-through re-accelerating inflation
- ▼Subsidy and FX pressure if Brent breaks $108
Every morning.
Free.