Headlines
RCEP momentum and a bigger NBFI depositor backstop headline today.
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)
Corridor steady; call money at 8.79% signals ample interbank liquidity.
FX Reserves
Gross reserves climbed to $37.35bn as of the Aug 2026 print, up from $33.19bn in Dec 2025; net reserves stood at $32.44bn.
Recovery off the Dec 2025 series start ($33.19bn), holding just below the window peak.
Treasury: the reserve buffer gives BB room to hold the corridor; watch whether the build sustains into H2.
WATCH
- ◆Call money against the 9.5% repo — a move above would flag tightening liquidity
- ◆Whether the reserve build sustains past the $37.35bn Aug print
RISK
- ▼Liquidity comfort masking weak private credit demand rather than a healthy market
- ▼Reserve gains resting on inflows rather than a trade surplus
The corridor has been left unchanged at 9.5% since the 30 Jul cut, and the market is now trading comfortably inside it — call money at 8.79% sits closer to the 7.5% SDF floor than the 11.0% SLF ceiling, the signature of surplus liquidity. That surplus is the puzzle of the moment: banks are flush, yet private credit growth was just 4.98% YoY on the Aug 2026 print, near the floor of the cycle. Cheap money is not reaching borrowers, which points to demand weakness and risk aversion on stressed balance sheets rather than a supply constraint. Reserves at $37.35bn on the Aug print give BB room to hold; the desk reads the next MPS as a hold, with the transmission gap — not the rate — the variable to watch.
Banking
Defensive on bank credit; provisioning coverage the line to watch.
Overnight Money Market
DOMMR (Dhaka Overnight Money Market Rate) eased to 8.84% by the 24 Sep print, down from 10.09% at the mid-April series start; BOFR (Bangladesh Overnight Financing Rate) at 9.01%.
Off the 10.65% peak toward the 8.67% low across the series since 15 Apr 2026.
Treasury: overnight funding is cheap and stable, yet the 4.98% Aug private-credit read shows it is not reaching borrowers.
WATCH
- ◆Q3 2026 CAR disclosure — the first capital refresh in a year
- ◆Provisioning coverage against the 32.78% Q2 NPL stock
- ◆Whether private credit growth (4.98% Aug) turns with asset quality
RISK
- ▼Current capital adequacy running below the year-old 1.56% Q3 2025 read if NPLs rose further
- ▼Weak 4.98% private credit growth deepening the earnings squeeze on stressed banks
- ▼Rescue-law delay leaving failing NBFIs without a resolution path
The two banking prints describe a system where the asset side has deteriorated faster than the capital side can be measured. NPLs at 32.78% on the Q2 2026 print put roughly a third of the loan book in non-performing status, while the only capital read available — CAR of 1.56% on the Q3 2025 print — is a full year stale and likely flatters the current position, since the stressed stock has had four more quarters to erode provisions. The mispricing is in treating system solvency as settled: it is undisclosed, and the direction of travel is against it. Private credit growth of 4.98% YoY on the Aug 2026 print confirms the freeze — cheap corridor funding is not converting to lending because stressed balance sheets cannot carry new risk. The desk stays defensive on bank credit and waits on the Q3 2026 capital print before re-rating the sector.
FX & External
Reserves building but the external gap stays wide on stale trade data.
External Flow Balance
Imports hit a series-high $7.51bn in the Jun 2026 print while exports were $4.20bn, up from $3.35bn a year earlier.
Import bill at its series high, up from $5.25bn at the Jul 2024 start.
Treasury: the export lift narrows the gap only partly; watch import cover and reserve drawdown if the bill holds near $7.5bn.
WATCH
- ◆USD/BDT 123.22 — the pace of managed depreciation
- ◆Whether reserves hold above $37bn past the Aug print
- ◆Q1 FY27 trade data to refresh the Jun deficit read
RISK
- ▼Reserve gains reversing if the trade gap held near the Jun $3.31bn pace
- ▼Imports at the series-high $7.51bn (Jun) outrunning the export recovery
- ▼Gold at $4,327/oz signalling global risk-off pressure on flows
DSE Markets
Soft tape: breadth negative, turnover thin on the 22 Sep close.
DSEX Index
The DSEX closed at 5,540.32 on the 22 Sep print, up about 3% from 5,380.08 a year earlier and below the 5,926 series high.
At a 3-session low (5,532.15 on 17 Sep the last lower close).
Equity desk: a drift lower on thin volume, not a trend break; watch the 5,532 level and turnover for direction.
WATCH
- ◆Whether the DSEX holds the 5,532.15 (17 Sep) support on the next print
- ◆Turnover recovering above BDT 791cr as a conviction signal
- ◆Breadth — 227 decliners against 103 advancers on 22 Sep
RISK
- ▼Thin BDT 791cr turnover amplifying moves in either direction
- ▼Index rolling over from the 5,926 series high toward the 4,703 low
- ▼Retail participation fading with rates still elevated
T-Bonds & T-Bills
Curve flattened lower; auction cut-offs near 8.5% on the Sep prints.
BD Govt Yield Ladder
Yields fell hard from Jul to the Sep 2026 print: 364d T-Bill 8.47% vs 10.09%, 10y 8.54% vs 10.24%.
Down roughly 160bp across tenors since the Jul 2026 series start (10.09% at 364d then).
Treasury: lower funding cost for GoB, but reinvestment risk for banks rolling maturing bills into a curve near 8.5%.
WATCH
- ◆The next 364d auction cut-off against the 8.47% 21 Sep clear
- ◆Whether the curve steepens if issuance rises into H2 FY27
- ◆The flat 5y-10y segment (8.645% vs 8.54%) normalising
RISK
- ▼ALM (Asset-Liability Management) mismatch as loan and deposit books reprice against a fast-falling curve
- ▼Government funding cost re-rising if inflation prints surprise up
- ▼Duration marks swinging on held-to-maturity books after the fast move
Macro & Inflation
CPI easing to 8.66% (Aug), but non-food and weak credit persist.
CPI Trend
The 12-month CPI average eased to 8.66% as of the Jul 2026 chart point, down from the 10.34% series high toward the 8.59% low.
The lowest since May 2026 (8.6% then), extending a two-year descent from 9.95% in Aug 2024.
ALCO: real rates positive and inflation cooling support a hold at 9.5%; the sticky non-food read keeps a cut off the table.
WATCH
- ◆The Sep 2026 CPI print for confirmation of the easing trend
- ◆Whether M2 growth (11.76% Jul) feeds inflation or credit
- ◆A REER (Real Effective Exchange Rate) refresh past the 209-day-old Mar 2026 read
RISK
- ▼Non-food CPI stuck at 9.28% (Jul) keeping headline inflation elevated
- ▼M2 at a multi-year high risking a fresh price impulse
- ▼REER at 102.78 (Mar) signalling taka overvaluation if it held
The macro picture is a policy caught between two signals it cannot reconcile from same-vintage data. Inflation is drifting down — the 12-month average at 8.66% on the Aug 2026 print is the lowest since May 2026 (8.6% then) — and the real policy rate has turned positive at 1.24%, both arguments for BB to hold at 9.5%. Against that, M2 growth of 11.76% YoY on the Jul print is the highest since Jul 2021 (12.3% then), a monetary expansion that usually precedes a price impulse. The resolution is in the credit channel: private credit growth of just 4.98% YoY (Aug) shows the money is not being lent out, so broad-money growth is being parked, not spent. For the desk, that argues real-economy demand stays soft, asset-quality pressure on banks persists, and the MPS holds rather than cuts into a still-elevated non-food print of 9.28%.
Remittance
Inflows resilient at $2.97bn (Aug flash), up sharply year on year.
Remittance Inflow
Monthly remittance was $2.86bn as of the Jul 2026 chart point, up from $2.42bn a year earlier; the series peaked at $3.76bn.
Up about 18% over the 12-month series from $2.42bn at the Aug 2025 start.
Treasury: remittance remains the reliable external cushion; a durable inflow base supports reserves and the managed USD/BDT path.
WATCH
- ◆The final August remittance print revising the $2.97bn flash
- ◆Whether inflows hold above $2.9bn into the post-festival months
- ◆Formal-channel share against the USD/BDT 123.22 rate incentive
RISK
- ▼The provisional flash revising down on final data
- ▼A seasonal fade after the mid-year peak of $3.76bn
- ▼A wider rate gap pushing flows back to informal channels
Fiscal
Fiscal data lagging; NBR YTD at BDT 4.15tn on the Sep read.
NBR Tax Revenue
Monthly NBR revenue was BDT 28,027cr as of the Oct 2025 print, up from BDT 26,555cr a year earlier; the series peaked at BDT 52,720cr.
Latest chart point is Oct 2025 — the plotted series lags the YTD headline by nearly a year.
Fiscal desk: the collection trend on the chart predates FY27; treat the BDT 4.15tn YTD figure as the operative but unrefreshed number.
WATCH
- ◆NBR YTD refresh past the BDT 4.15tn Sep read
- ◆Government bank borrowing against the BDT 0.94tn Jun print as issuance rises
- ◆The monthly NBR revenue trend off the Oct 2025 chart tail
RISK
- ▼A revenue shortfall widening the deficit and lifting bank borrowing
- ▼Higher domestic financing crowding private credit already weak at 4.98%
- ▼Stale fiscal data masking an in-year slippage
Iran War & Oil
Brent at $97.59 keeps the energy import bill elevated into H2.
Brent Crude
Brent stood at $97.59 as of the 25 Sep chart point, up from $71.99 at the late-Jun start; it peaked at $108.35 in the window.
Up roughly 35% since the 28 Jun 2026 series start ($71.99 then), off a $108.35 high.
Treasury: high-$90s oil sustains the import bill; watch energy-importer credit lines for receivables stretch on the next refi cycle.
WATCH
- ◆Brent holding below the $108.35 window peak
- ◆Pass-through of high-$90s oil into the next import bill and trade gap
- ◆LNG procurement cost as the Moheshkhali transfer resumes
RISK
- ▼A renewed spike above $108 on conflict escalation
- ▼A higher fuel import bill widening the trade deficit and pressuring reserves
- ▼Subsidy and inflation feed-through from sustained high energy costs
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