Headlines
BB holds at 9.50% as fuel hikes keep the inflation risk live.
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 unchanged at 7.50%–11.00%; call money 8.59% on the 28 Sep print.
FX Reserves
Gross reserves climbed from $33.19bn in Dec 2025 to $37.35bn as of the Aug 2026 print, just below the $37.58bn window peak.
A $4.16bn build over the nine months since the Dec 2025 trough of $33.19bn.
Treasury: a thicker FX buffer supports import cover near 5.5 months; watch whether the Aug print holds through the autumn import-financing cycle.
WATCH
- ◆Interbank call money drift versus the 7.50% SDF floor
- ◆Q2 FY27 MPS guidance on any further easing
- ◆December-quarter liquidity as government borrowing resumes
RISK
- ▼Fresh fuel and pay-scale hikes reigniting inflation and forcing a pause on easing
- ▼Call money spiking if deposit growth lags credit demand
- ▼Reserve drawdown if the FX front turns
The September MPS holds the repo rate at 9.50% and the corridor at 7.50%–11.00%, a stance Bangladesh Bank frames around inflation risk rather than growth support. Overnight call money at 8.59% on the 28 Sep print sits well below the ceiling, so the hold binds on the price of money, not its availability — interbank liquidity is comfortable. The signal for the desk is that policy easing is on pause while the new pay scale and the latest fuel-price increases work through the index. With the real policy rate only marginally positive at 1.24% on the August read, a single bad inflation print narrows the room to cut further. Treasury should price the front end for a hold through the December quarter and treat a dovish surprise, not a hawkish one, as the tail.
Banking
NPLs near a third of loans; CAR a year stale at 1.56%.
Overnight Money Market
DOMMR fell from 10.09% in mid-April to 8.70% as of the 28 Sep print, near its 8.67% window low.
A 139bp decline since the 15 Apr 2026 series start, tracking the summer policy easing.
Treasury: interbank funding is cheap and liquidity ample; expect the overnight rate to hold near the SDF floor while the policy rate stays at 9.50%.
WATCH
- ◆Q1 2027 NPL disclosure for whether the Q2 2026 32.78% has turned
- ◆A fresh CAR reading beyond the Q3 2025 print
- ◆DOMMR drift as the policy hold feeds through
RISK
- ▼Provisioning shortfall at the state banks eroding system capital
- ▼A fresh CAR print confirming thin buffers against the NPL stock
- ▼Credit growth stalling as banks ration risk
Banking is where the system's stress is concentrated and least visible in real time. System NPLs printed 32.78% in Q2 2026, close to a third of all loans, and the composition matters more than the headline: the bulk sits with a small number of state-owned commercial banks, which pools the tail risk in balance sheets the sovereign ultimately stands behind. Against that, the capital data has not refreshed in a year — CAR was last published at 1.56% for Q3 2025 — so the desk is reading a large, known loss stock against an unknown current buffer. Overnight funding has eased, with DOMMR down to 8.70% on 28 September from above 10% in April, which lowers carrying cost but does nothing for the provisioning hole. For counterparty lines to the weaker state banks, assume capital is the binding constraint and size exposure to the NPL reality, not the stale ratio.
FX & External
Taka anchored near 122.76; reserves $37.35bn on the August print.
External Flow Balance
Monthly exports reached $4.20bn in the Jun 2026 print, up from $3.35bn a year earlier, within a $3.03bn–$4.78bn range.
A 25% rise over the twelve months to Jun 2026.
Trade desk: export receipts cushion the import bill, but the $6.78bn Jul import run keeps the goods gap wide; watch H2 import settlement.
WATCH
- ◆Reserve refresh beyond the Aug 2026 $37.35bn print
- ◆USD/BDT drift from the 122.76 level into the autumn import season
- ◆Export momentum after the strong Jun 2026 reading
RISK
- ▼Import bill widening the trade gap as Brent sits near $98
- ▼Any export shock from India's anti-dumping actions
- ▼Gold at $4,165/oz signalling global risk-off that could lift import costs
DSE Markets
Index soft near 5,540 with decliners outpacing gainers on the 22 Sep tape.
DSEX Index
DSEX closed at 5,540.32 as of the 22 Sep print, up just 1.7% over the year from 5,447.63 and 6.5% below the 5,926 window high.
The 22 Sep close marked a 3-session low (5,532.15 on 17 Sep the last lower close).
Equity desk: index range-bound in the lower third; expect direction to wait on the first full post-MPS week before adding risk.
WATCH
- ◆The first post-MPS session for direction after the 9.50% hold
- ◆Breadth repair beyond the 103/227 advance-decline split
- ◆Turnover recovery from the thin Tk 791cr print
RISK
- ▼Bank-sector weakness after seven names left the CSE50 benchmark
- ▼Liquidity thinning if turnover stays sub-Tk 800cr
- ▼A break below the 3-session low of 5,532.15
T-Bonds & T-Bills
T-bill cut-offs near 8.3%–8.9% at the 28 Sep auction; curve lower since July.
BD Govt Yield Ladder
The 10-year yield fell from 10.24% in Jul 2026 to 8.54% as of the Sep 2026 print, a 170bp drop to the series low.
The steepest leg of a broad curve repricing lower across the three monthly prints since Jul 2026.
Treasury: mark-to-market gains on existing long holdings; expect primary cut-offs to track the policy hold at 9.50% rather than fall much further.
WATCH
- ◆Next T-Bill auction cut-offs for whether the 364d holds near 8.95%
- ◆The 364d–91d spread after the latest 67bp gap
- ◆Long-bond refresh beyond the mid-September prints
RISK
- ▼Government borrowing lifting cut-offs if the autumn calendar is heavy
- ▼Duration marks if yields reverse the summer fall
- ▼Thin secondary liquidity in the long tenors
Macro & Inflation
12-month CPI at 8.66% on the Aug print; private credit soft at 4.98%.
CPI Trend
The 12-month average CPI eased to 8.66% as of the Jul 2026 print, down from 9.77% a year earlier and near the 8.59% series low.
The decline has run twelve months off the 10.34% window peak — lowest since May 2026 (8.6% then).
Treasury: with the real policy rate only 1.24% positive, expect Bangladesh Bank to stay on hold; sticky non-food CPI caps the room to cut.
WATCH
- ◆September CPI for whether the 8.66% easing continues
- ◆Non-food inflation holding above 9% despite the headline fall
- ◆Private credit recovery from the 4.98% August low
RISK
- ▼Fuel and pay-scale hikes reversing the inflation decline
- ▼Loose M2 at 11.76% feeding back into prices
- ▼Weak private credit signalling stalled investment
Remittance
September flash at $2.97bn keeps the FX inflow firm, provisional.
Remittance Inflow
Monthly remittance ran $2.86bn in the Jul 2026 print, up from $2.42bn a year earlier, within a $2.42bn–$3.76bn twelve-month range.
An 18% rise over the year to the Jul 2026 print, off a $3.76bn window peak.
Treasury: the inflow trend underwrites the reserve build; the provisional Sep flash of $2.97bn, if confirmed, extends it above the July level.
WATCH
- ◆Confirmation of the Sep 2026 flash against the final BB figure
- ◆Whether monthly inflows hold above the $2.86bn July level
- ◆The festival-season inflow pattern into the December quarter
RISK
- ▼Downward revision of the provisional $2.97bn flash
- ▼Channel shift to informal money-transfer channels if the formal-rate spread widens
- ▼A pullback toward the $2.42bn range low
Remittance is doing the heavy lifting on the external account, and the provisional September flash of $2.97bn from Bangladesh Bank extends that run above the $2.86bn confirmed for July. The mechanism is straightforward: strong formal-channel inflows have let gross reserves build to $37.35bn on the August print from $33.19bn last December, and they are the main counterweight to a goods-trade deficit that persists as the monthly import bill sits near $6.78bn. That buffer is what holds the taka steady at USD/BDT 122.76 and keeps import cover near 5.5 months. The risk is durability rather than level: the figure is provisional, and the spread between the formal and curb exchange rates is what keeps inflows in the banking channel. The book stays constructive on the FX runway, with the caveat that one soft revision or a widening rate spread can turn the swing factor the other way.
Fiscal
NBR at BDT 4.15tn YTD; bank borrowing BDT 0.94tn on the June print.
NBR Tax Revenue
Monthly NBR tax revenue was BDT 28,027cr in the Oct 2025 print, up from BDT 26,555cr a year earlier, within a BDT 21,478cr–52,720cr range.
A 5.5% rise over the year to the Oct 2025 print, well off the series peak of BDT 52,720cr.
Fiscal desk: the revenue line is grinding higher but short of pace, so expect the government to keep leaning on bank borrowing and T-Bills.
WATCH
- ◆Monthly NBR revenue refresh beyond the BDT 4.15tn YTD figure
- ◆Government bank borrowing update past the June BDT 0.94tn print
- ◆Auction sizes signalling the H1 FY27 financing need
RISK
- ▼Revenue shortfall widening the deficit and lifting bank borrowing
- ▼Crowding-out pressure on private credit, already weak at 4.98%
- ▼NBR–port friction disrupting trade-tax receipts
Iran War & Oil
Brent at $97.98 and WTI $92.71 keep fuel-cost pressure on.
Brent Crude
Brent climbed from $71.61 in early July to $97.98 as of the 28 Sep print, a 37% rise, off a $108.35 window high.
The rally has run since the 3 Jul 2026 series start, peaking at $108.35 before easing back near $98.
Credit/risk: for energy-importer lines, watch 60–90 days-past-due receivables on the next refi cycle; expect import-cost pressure on the autumn trade balance.
WATCH
- ◆Whether Brent holds near $98 or retests the $108 window high
- ◆Pass-through from the furnace-oil hike into power tariffs
- ◆Import-bill impact on the next monthly trade print
RISK
- ▼A move toward the $108 July peak widening the import bill
- ▼Energy-importer credit lines seeing receivables stress
- ▼Fuel-driven inflation forcing a pause on policy easing
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