Headlines
Watch today's MPS; the curve has eased but credit has not.
The day's front pages converge on one event: Bangladesh Bank's first quarterly monetary policy statement, out today. The market has front-run it — money-market rates already sit under the 9.50% repo, with the 364-day T-bill at 8.95% on 28 Sep and call money at 8.59% — so the question is transmission, not direction. Private credit growth held at 4.98% in the August print, below 5% for a sixth month, which says the easing already in the curve is not reaching borrowers. Around the MPS, the IMF has picked holes in the NBR revenue-reform plan and the central bank has issued its first Islamic credit-card guidelines. For the desk, the statement is the near-term signal that decides whether the front end holds its bid.
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 at 9.50%; the MPS today sets the next leg.
FX Reserves
Gross reserves climbed to $37.35bn by the Aug 2026 print from $33.19bn last December, a rebuild of over $4bn across nine months.
The Aug 2026 reading sits just below the $37.58bn series peak, up from the $33.18bn window floor.
Treasury: external cover restored ahead of the MPS; expect the corridor held and liquidity to keep call money below the repo.
WATCH
- ◆Today's MPS for any corridor move
- ◆Call money drift versus the 9.50% repo
- ◆Reserve path after the August $37.35bn print
RISK
- ▼MPS surprising hawkish against soft credit
- ▼Interbank liquidity tightening if reserves are drawn for imports
Bangladesh Bank moves to a quarterly monetary policy statement today, and the market has already priced the easing it is likely to confirm. The repo has sat at 9.50% since the 30 Jul cut, yet the 364-day T-bill cut off at 8.95% on 28 Sep and call money held at 8.59%, both trading under the policy rate — the signature of surplus interbank liquidity. Reserves rebuilt to $37.35bn in August from $33.19bn last December, which removes the external constraint that forced the tightening cycle. The question the MPS must answer is transmission: with private credit growth stuck at 4.98% in the August print, lower funding costs are not reaching borrowers. The desk stays neutral on the corridor and long the front end, where liquidity keeps cut-offs anchored.
Banking
NPLs near a third of the book; capital read stuck at Q3 2025.
Overnight Money Market
DOMMR eased to 8.70% by the 28 Sep print from 10.09% in mid-April; BOFR tracked lower to 8.86% over the same window.
Overnight rates now sit near their window lows of 8.67% (DOMMR) and 8.68% (BOFR), down from April peaks.
Treasury: overnight funding is cheap and stable, supporting carry; the constraint on bank lending is capital, not liquidity.
WATCH
- ◆Q3 2026 NPL disclosure for direction off 32.78%
- ◆Fresh CAR data to update the Q3 2025 read
- ◆Overnight rate path as a funding-cost signal
RISK
- ▼Provisioning shortfall if NPLs concentrate further
- ▼Thin capital limiting credit supply into the cycle
Asset quality remains the system's defining problem: NPLs at 32.78% in the Q2 2026 print mean close to a third of loans are not performing, a burden concentrated in a handful of state-owned balance sheets that anchor the tail risk. The capital side is where the data goes dark — the latest CAR reading is 1.56% from Q3 2025, a full year old, which leaves the buffer behind that NPL stock effectively unmeasured today. Meanwhile funding costs have eased: the Dhaka Overnight Money Market Rate (DOMMR) fell to 8.70% by 28 Sep from above 10% in April, and the Bangladesh Overnight Financing Rate (BOFR) tracked it to 8.86%. Cheaper overnight money helps carry, but it does not repair capital. The desk treats bank credit exposure as capital-constrained until Q3 disclosure lands, favouring names with visible provisioning coverage.
FX & External
Taka anchored near 122.76; export data lags at the June print.
External Flow Balance
Exports reached $4.20bn by the Jun 2026 print, up from $3.35bn a year earlier; imports ran hotter at $6.78bn in the Jul 2026 print.
Imports at $6.78bn sit near the $7.51bn series peak; the trade gap has widened through 2026.
Treasury: a widening trade gap leans on remittance and reserves to fund the shortfall; watch the July export refresh.
WATCH
- ◆USD/BDT drift around the 122.76 mid
- ◆July–August export prints to refresh the June $4.20bn read
- ◆Reserve path after the August $37.35bn print
RISK
- ▼Gold at $4,165/oz signalling global risk-off
- ▼Import bill pressure from Brent near $98/bbl
DSE Markets
Index soft near 5,540; decliners led advancers more than two to one.
DSEX Index
DSEX at 5,540.32 in the 22 Sep 2026 print is up just 2.3% from 5,415.79 a year earlier, well off the 5,926.28 window high.
The latest close marks a 3-session low (5,532.15 on 17 Sep the last lower close).
Equity risk: index range-bound near yearly-flat; watch for a break of 5,532 support before adding beta exposure.
WATCH
- ◆Fresh DSE prints to update the 22 Sep 5,540.32 close
- ◆Turnover recovery above Tk 791cr
- ◆Breadth stabilising off the 227/103 decline ratio
RISK
- ▼Continued drift below the 5,532 support from 17 Sep
- ▼Thin liquidity amplifying downside on any block selling
T-Bonds & T-Bills
Curve much lower than July; long-end reads lag by two weeks.
BD Govt Yield Ladder
The 364-day T-bill fell from 10.09% in July to 8.95%, and the 10-year from 10.24% to 8.54% by the Sep 2026 print.
The three-month series shows every tenor below its July high, the 10-year down from a 10.24% peak.
Treasury: front end has priced the easing; expect the MPS to validate rather than lead, and watch for steepening on the long-end catch-up.
WATCH
- ◆Whether the 364-bill extends its rise off 8.47%
- ◆Today's MPS for a signal to the curve
- ◆Fresh 5y/10y quotes to update the mid-Sep reads
RISK
- ▼Curve steepening if long-end quotes catch down slowly
- ▼Duration mismatch on long-tenor loans if the front reprices faster than the long end
Macro & Inflation
Inflation easing but sticky; credit soft while M2 runs hot.
CPI Trend
The 12-month average CPI eased to 8.66% from 9.97% at the series start in Sep 2024, a steady disinflation.
The reading is the lowest since May 2026 (8.6% then), extending the move down off a 10.34% series high.
Treasury: real rates positive but thin; expect the MPS to hold as ample M2 has yet to lift private credit off 4.98%.
WATCH
- ◆September CPI to confirm the move below the May 2026 8.6% low
- ◆Private credit for any break above the 5% line
- ◆M2 growth after the Jul 2026 11.76% reading
RISK
- ▼Non-food inflation staying near 9.32% and stalling disinflation
- ▼Ample M2 not transmitting to private credit, blunting policy
The macro picture is one of easing inflation meeting stalled credit. The 12-month average CPI fell to 8.66% in the August print, the lowest since May 2026 (8.6% then), and food P-to-P inflation has come down to 7.02%, though non-food remains sticky at 9.32%. With the repo at 9.50% and August P-to-P CPI at 8.26%, the real policy rate is +1.24% — positive but thin. The puzzle is transmission: M2 growth ran to 11.76% in the July print, the highest since Jul 2021 (12.3% then), yet private credit growth held at 4.98% in the August print, below 5% for a sixth month. Money is being created but is not reaching private borrowers — it is pooling in government paper and excess reserves. For the desk, this argues that the MPS has room to hold or ease without stoking demand-side inflation, but the binding constraint on credit is confidence and asset quality, not the price of funds.
Remittance
Inflows steady near $2.97bn; August figure still provisional.
Remittance Inflow
Monthly remittance was $2.86bn in the Jul 2026 print, up from $2.42bn a year earlier, off a $3.76bn peak in the window.
Inflows have ranged from a $2.42bn floor in Aug 2025 to a $3.76bn peak across the 12-month window.
Treasury: remittance remains the external account's steadiest leg, funding part of the trade gap; watch for the August flash to be confirmed.
WATCH
- ◆Confirmation of the provisional $2.97bn August flash
- ◆Whether inflows hold above $2.9bn into the next month
- ◆Formal-channel share versus the taka's stability
RISK
- ▼Downward revision to the provisional August number
- ▼Inflows softening if the exchange-rate incentive narrows
Fiscal
Revenue flat at Tk 4.15tn YTD; bank borrowing lags at June.
NBR Tax Revenue
Monthly NBR revenue was Tk 28,027cr in the Oct 2025 print, up from Tk 26,555cr a year earlier, well below the Tk 52,720cr series peak.
The Oct 2025 reading is the latest plotted, up 5.5% on the Oct 2024 comparison in the series.
Fiscal: collection momentum is modest against the peak, keeping the deficit reliant on bank borrowing; watch NBR monthlies for the reform's traction.
WATCH
- ◆Fresh NBR monthly collection to break the Tk 4.15tn plateau
- ◆Updated government bank borrowing beyond the June Tk 0.94tn read
- ◆IMF review conclusions on the NBR revenue-reform plan
RISK
- ▼Revenue shortfall widening the fiscal gap
- ▼Government borrowing crowding out already-weak private credit
Iran War & Oil
Brent up sharply since July; energy import costs stay elevated.
Brent Crude
Brent climbed from $71.18 in early July to $97.98 by the 28 Sep print, having peaked at $108.35 during the quarter.
The $71.18 low opened the series on 2 Jul; crude has since risen roughly 38% off that base.
Credit: watch petroleum-import demand and current-account drag; a hold above $95 pressures energy-sector receivables on the next refi cycle.
WATCH
- ◆Brent holding above $90 into the next refi cycle
- ◆Pass-through to the import bill and current account
- ◆Any move back toward the $108 quarterly high
RISK
- ▼Sustained crude above $95 widening the import bill
- ▼Energy-importer receivables slipping 60–90 days past due on the next refinancing cycle
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