Headlines
Fuel shock and bank-sector distress dominate; foreign inflows a rare bright spot.
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 intact; overnight funding steady, no near-term policy signal to trade.
FX Reserves
Gross reserves stand at $37.35bn on the Aug 2026 print, a rebuild from $33.19bn in Dec 2025, with net reserves of $32.44bn.
Series high is $37.58bn against the $33.19bn Dec 2025 low.
Treasury: the Aug reserve stock cushions FX cover, but an oil-driven import bill is the swing factor to watch into Q4.
WATCH
- ◆Next MPS for any signal after the 30 Jul cut
- ◆Call money drift toward the 11.00% SLF ceiling
- ◆Aug reserves refresh into the September print
RISK
- ▼A reserves drawdown if the oil-driven import bill widens
- ▼Liquidity tightening pulling call money toward the ceiling
Banking
Bad-debt stock near a third of loans on the Q2 print; watch capital.
Overnight Money Market
DOMMR eased to 8.84% by the 24 Sep read from 10.09% in mid-April; BOFR at 9.01%, both drifting lower with liquidity.
Rates have fallen across the Apr–Sep 2026 window, from a 10.65% DOMMR high to an 8.67% low.
Credit: cheap overnight funding is holding up weak banks; watch for any reversal that would pressure second-tier balance sheets first.
WATCH
- ◆Q3 2026 NPL disclosure for direction off the 32.78% Q2 base
- ◆A refreshed CAR print to replace the year-old Q3 2025 read
- ◆Interbank rates for funding-cost pressure on weaker banks
RISK
- ▼Provisioning shortfalls compressing capital at the weakest banks
- ▼Rising funding costs if interbank rates climb from the 8.84% overnight read
System NPLs at 32.78% on the Q2 2026 print keep close to a third of outstanding loans non-performing, and the capital picture behind that stock is a year stale — the CAR figure we carry is the Q3 2025 read at 1.56%. The gap between a live bad-debt number and a year-old capital number is itself the risk: the sector's loss-absorption capacity against the current NPL stock is not observable in fresh data. Interbank funding, by contrast, is current and easy — the Dhaka Overnight Money Market Rate (DOMMR) eased to 8.84% by the 24 Sep read from 10.09% in mid-April, and the Bangladesh Overnight Financing Rate (BOFR) sits at 9.01%, so weak banks are not yet being squeezed on overnight funding. The desk position is to treat unsecured and second-tier bank exposure as the vulnerable leg: cheap overnight money masks a solvency question that only a refreshed CAR print will settle.
FX & External
Taka pinned near 123; the oil-fed import bill is the external-account risk.
External Flow Balance
Imports hit a series-high $7.51bn in Jun 2026, up from $4.39bn a year earlier; exports $4.20bn vs $3.35bn — the gap is widening.
Both figures are the Jun 2026 prints; imports are at their series peak of $7.51bn.
Treasury: import growth outpacing exports is the pre-oil baseline; add Brent at $104 and the dollar-demand curve steepens into Q4.
WATCH
- ◆Reserves refresh past the $37.35bn Aug print
- ◆The next monthly export figure off the $4.20bn Jun base
- ◆USD/BDT pressure if the oil bill lifts dollar demand
RISK
- ▼Oil-driven import growth widening the trade gap from $3.31bn
- ▼Reserve drawdown compressing import cover below five months
The oil shock reaches Bangladesh's external accounts through the import bill, and that is where the desk should focus. Brent at $104.32 is up from $73.23 in late June, and fuel is a large, price-inelastic slice of the import basket — so a higher crude price mechanically widens a trade gap that was already $3.31bn on the June print, against exports of $4.20bn. Reserves at $37.35bn for August give roughly five months of import cover on June data, a cushion but not a deep one, and every month of elevated oil erodes it at the margin. The taka has held at USD/BDT 123.22, but the peg's stability rests on that cover holding. The desk position is to keep import-LC and dollar-funding lines well hedged into Q4 and to treat any reserves print below the August level as the first confirmation that the oil bill is biting.
DSE Markets
Breadth negative, turnover thin; the tape drifting lower on the Sep 22 read.
DSEX Index
DSEX at 5,540.32 as of the 22 Sep print, up ~3% from 5,380.08 a year ago; a 4,703–5,926 range over the year.
The 22 Sep close was a 3-session low (5,532.15 on 17 Sep the last lower close).
Equity desk: mid-range and drifting on thin turnover; watch breadth and foreign flows before adding beta.
WATCH
- ◆Turnover recovery above the BDT 791cr 22 Sep level
- ◆Whether foreign inflows broaden breadth
- ◆DSEX holding the 5,532 support from 17 Sep
RISK
- ▼Thin turnover amplifying downside on any macro shock
- ▼Oil-driven inflation denting retail participation
T-Bonds & T-Bills
Short curve flat around 8.4% after the summer's sharp decline in yields.
BD Govt Yield Ladder
Yields fell hard over three prints: the 364d from 10.09% in Jul to 8.47% in Sep, the 10y from 10.24% to 8.54%.
The Sep 2026 prints are the series lows across the Jul–Sep window for both tenors.
Treasury: the curve has repriced a full easing cycle in one quarter; further downside looks limited if oil lifts inflation expectations.
WATCH
- ◆Next auction cut-offs off the 8.32–8.47% 21 Sep base
- ◆Whether oil-driven inflation halts the yield decline since July
- ◆Refreshed 5y/10y bond marks past the mid-Sep reads
RISK
- ▼A yield back-up if inflation re-accelerates on oil
- ▼Duration mark-to-market losses on held bond books
Macro & Inflation
Disinflation stalling near 8.7%; oil threatens the fragile real-rate cushion.
CPI Trend
The 12-month average CPI eased to 8.66% as of the Jul 2026 print, down from 9.77% a year earlier; food p2p at 8.6%.
The Jul 2026 reading is the lowest since May 2026 (8.6% then).
Treasury: disinflation has stalled near 8.7%; with Brent at $104, expect the MPC to hold rather than cut at the next MPS.
WATCH
- ◆The September CPI print for direction off 8.66%
- ◆Whether oil reverses the disinflation since May 2026
- ◆Private credit recovery from the 4.98% August low
RISK
- ▼Oil-driven CPI re-acceleration turning the real rate negative
- ▼Weak private credit signalling stalled investment demand
Remittance
Inflows resilient near $3bn; a partial offset to the widening oil import bill.
Remittance Inflow
Remittances ran at $2.86bn on the Jul 2026 print, ahead of the $2.42bn logged a year earlier, within a 12-month range of $2.42bn to $3.76bn.
The Jul 2026 print sits above the $2.42bn low of Aug 2025; the window peak was $3.76bn.
Treasury: the remittance line is the reliable dollar inflow funding the deficit; watch it as the counterweight to the oil-driven import bill.
WATCH
- ◆The final August figure versus the $2.97bn flash
- ◆September inflows sustaining the near-$3bn run-rate
- ◆Whether remittance strength offsets the oil-driven import bill
RISK
- ▼A pullback below $2.5bn removing the import-bill cushion
- ▼Informal-channel leakage if the spread to kerb rates widens
Fiscal
Revenue tally unchanged; government bank borrowing last read BDT 0.94tn in June.
NBR Tax Revenue
NBR's monthly revenue printed BDT 28,027cr in Oct 2025, above the BDT 26,555cr of a year earlier — a modest 5.5% gain.
The Oct 2025 point is the latest plotted; the series peak was BDT 52,720cr.
Fiscal: revenue growth this soft against a rising deficit means bank borrowing does the heavy lifting; watch the crowding-out of private credit.
WATCH
- ◆A refreshed NBR monthly figure past the Oct 2025 series point
- ◆Government borrowing update beyond the BDT 0.94tn June read
- ◆Graduation from Least Developed Country status shaping the tariff revenue base
RISK
- ▼Revenue undershoot forcing heavier bank borrowing
- ▼Crowding-out of private credit already growing just 4.98%
Iran War & Oil
Oil the dominant macro variable; every dollar feeds the import bill.
Brent Crude
Brent climbed from $73.23 in late June to $104.32 as of the 25 Sep print — a ~40% run, peaking at $108.35.
The late-June low was $71.18; the window high was $108.35.
Treasury: at this level oil is the top macro risk — hedge energy-importer credit lines and expect import-bill and inflation pressure into Q4.
WATCH
- ◆Whether Brent holds above $100 or retraces toward the $73 late-Jun base
- ◆Pass-through to the next CPI print via fuel and transport
- ◆Reserve cover if the import bill re-accelerates on oil
RISK
- ▼A further war escalation pushing Brent past the $108.35 peak
- ▼Fuel-subsidy or fiscal strain from sustained high crude
- ▼FX pressure as dollar demand for fuel imports rises
Oil is the variable that organises this issue. Brent at $104.32, up from $73.23 in late June, is a roughly 40% move driven by the Iran war's risk premium, and for Bangladesh — which imports the bulk of its fuel — that price feeds three channels at once. First, the import bill: fuel is a large, price-inelastic line, so higher crude widens a trade deficit already at $3.31bn on the June print. Second, inflation: the 12-month CPI eased to 8.66% on the August print, but energy and transport pass-through can stall that disinflation and keep the real policy rate near its thin 1.24% margin. Third, reserves: import cover is about five months on June data, and a sustained oil bill erodes that buffer. The desk stays defensive — hedge dollar-funding and import-LC exposure and expect the MPC to hold, not cut, at the next MPS while imported-inflation risk is live.
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