Headlines
A mixed week — exports recovered while oil and government borrowing kept pressure on.
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)
The policy corridor held all week as overnight money drifted toward the floor.
FX Reserves
Gross reserves climbed from $33.19bn in Dec 2025 to $37.35bn by the Aug 2026 print, near the $37.58bn series high.
Nine-month climb; the Aug 2026 reading sits just below the $37.58bn peak, with net BPM6 reserves at $32.44bn.
Treasury: a thicker reserve buffer cushions the oil-driven import bill, but the Aug print is two months stale entering Q2.
WATCH
- ◆Oct-Dec T-bill and T-bond auction sizes against the Tk30,107cr calendar
- ◆Overnight call money for any drift back above 8.50% as quarter-end liquidity unwinds
- ◆The next reserves print to confirm the climb past $37bn holds
RISK
- ▼Heavy government bank borrowing crowding private credit at the front end
- ▼A liquidity reversal pushing call money back toward the 11.00% SLF ceiling
Banking
Asset quality and capital remain the sector's binding constraint entering Q4.
Overnight Money Market
DOMMR fell from 10.09% in mid-Apr 2026 to 8.44% by the 1 Oct reading, its series low; BOFR tracked it down to 8.35%.
A near-six-month, 165bp slide in overnight funding since mid-April 2026, the easing concentrated into quarter-end.
Treasury: cheap overnight money supports carry and margin, but watch for a reversal as Q4 government borrowing hits the front end.
WATCH
- ◆The Q3 2026 NPL print, the first test of whether the ratio breaks above 32.78%
- ◆Any further Bangladesh Bank support lines to distressed NBFIs after Prime Finance
- ◆DOMMR for a reversal off its 8.44% low as quarter-end funding normalises
RISK
- ▼NBFI contagion from Prime Finance into interbank funding
- ▼The capital picture resting on a Q3 2025 read, 367 days old, as lending season opens
The week produced no new asset-quality data, and that is the signal: the system entered Q4 with NPL at 32.78% on the Q2 2026 print and capital last measured at 1.56% in Q3 2025. The movement was entirely in price — DOMMR fell to 8.44% by 1 Oct and BOFR (Bangladesh Overnight Financing Rate) to 8.35%, both series lows, as quarter-end liquidity stayed ample. For a book carrying this much impaired paper, cheaper funding widens net interest margin and buys time, but does nothing for provisioning or capital. The Prime Finance strains reported this week are the leading edge: distress surfaces in the NBFI channel before it reaches the published ratios. Into next week the desk should stay defensive on counterparty exposure to weaker NBFIs and watch the Q3 NPL print against the 32.78% level.
FX & External
Exports and reserves strengthened the external account while gold signalled global risk-off.
External Flow Balance
Monthly exports recovered to $4.20bn by the Jun 2026 print, up from $3.35bn a year earlier, while imports ran at $6.78bn in Jul 2026.
Exports up roughly 25% year-on-year on the Jun 2026 reading; imports remain well above exports at $6.78bn.
Treasury: a firmer export line funds more of the import bill, but oil above $100 widens the gap — watch the October trade print.
WATCH
- ◆October USD/BDT for any break from the 123 handle as the oil import bill lands
- ◆The next reserves print to confirm the climb past $37bn against higher energy payments
- ◆Gold for a continued safe-haven run that would pressure the global risk backdrop
RISK
- ▼Oil at $102 widening the import bill and eroding the reserve build
- ▼A gold-led risk-off episode tightening external financing conditions
DSEMarkets
Our latest DSE read is the 22 Sep close; no fresh week data.
DSEX Index
DSEX at 5,540.32 on the 22 Sep 2026 close is nearly flat on a year earlier (5,447.63), well below the 5,926.28 cycle peak.
a 3-session low (5,532.15 on 17 Sep the last lower close) — flat over twelve months.
Equity desk: a year of net-zero index return with a heavy tape; no fresh signal until the DSE feed updates past 22 Sep.
WATCH
- ◆The first post-feed DSE close to confirm whether 5,540 holds as support
- ◆Turnover for a recovery above the thin Tk791cr last seen on 22 Sep
- ◆Breadth — whether advancers reclaim the tape from the 103/227 split
RISK
- ▼A stale feed masking a further leg down below the 5,532 17 Sep low
- ▼Thin turnover signalling continued retail disengagement
T-Bonds & T-Bills
The one-year bill repriced sharply higher at Monday's auction while the short end held.
BD Govt Yield Ladder
Yields fell sharply over the quarter — the 364-day from 10.09% to 8.95% and the 10-year from 10.24% to 8.54% by the Sep 2026 print.
A roughly 150bp easing across tenors since Jul 2026, following the 30 Jul repo cut to 9.50%.
Treasury: the quarter's rally lowered debt-service cost, but the 28 Sep auction's 48bp back-up at the one-year warns the easing may be stalling.
WATCH
- ◆The first Oct T-bill auctions for whether the 364d holds above 8.95% under the Tk30,107cr calendar
- ◆The 10y and 5y prints, now 16 and 23 days old, for confirmation the long end follows
- ◆Bid-cover ratios at upcoming auctions as supply ramps into Q2
RISK
- ▼Heavier government supply pushing the whole curve higher and raising debt-service cost
- ▼A disorderly steepening that marks down existing fixed-rate bond books
One auction set the tone. At the 28 Sep sale the 364-day T-bill cut-off jumped to 8.95% from 8.47%, a 48bp move, while the 91-day eased to 8.28% and the 182-day rose only to 8.55%. The shape matters more than the level: the market lifted the one-year point and left the three-month anchored, a steepening that lines up with the week's fiscal news — a Tk30,107cr T-bill and bond calendar for October-December and a further Tk300b of bank borrowing flagged for Q2. Read the long-bill repricing as supply, not policy: the repo is unchanged at 9.50% and overnight money is easing, so this is the curve absorbing issuance. Into next week, expect the front-to-one-year segment to stay under upward pressure at the early-October auctions, and watch bid-cover for the first sign the calendar is testing demand.
Macro & Inflation
Headline inflation eased to 8.66% while M2 growth climbed to a multi-year high.
CPI Trend
The 12-month average CPI eased to 8.66% by Jul 2026; point-to-point food sat at 8.6% and non-food at 9.61% on the Jun 2026 print.
lowest since May 2026 (8.6% then), the disinflation led by food easing from a 13.8% series peak.
ALCO: 12-month CPI near 8.66% keeps the real policy rate barely positive at 1.24% — expect the MPC to hold at the next MPS.
WATCH
- ◆The September CPI print for confirmation the 8.66% downtrend extends
- ◆M2 growth, now at a Jul 2021 high, for any further acceleration ahead of the next MPS
- ◆Private credit, stuck near 4.98%, for signs the easing is reaching borrowers
RISK
- ▼Oil at $102 feeding back into non-food inflation and stalling the disinflation
- ▼M2 acceleration forcing the MPC to hold or tighten despite weak private credit
Remittance
Remittance eased to a reported 11-month low in September though the quarter rose.
Remittance Inflow
Monthly remittance ran at $2,858.68mn by the Jul 2026 print, up from $2,421.9mn a year earlier, within a $2,421.9mn–$3,755.1mn band.
The plotted series ends at the Jul 2026 print; the September flash of $2.97bn is newer and not yet charted.
Treasury: the trailing-year trend is up roughly 18% year-on-year, but watch the softer September flash for the first monthly reversal.
WATCH
- ◆The confirmed September figure to replace the provisional $2.97bn flash
- ◆October inflows for whether the monthly softening extends
- ◆Take-up of the new $1b mCapital NRB fund as a formal-channel draw
RISK
- ▼A sustained monthly slide pressuring the reserve build and import cover
- ▼Informal-channel leakage if the USD/BDT spread widens
Fiscal
Government set a Tk30,107cr market-borrowing plan for the December quarter this week.
NBR Tax Revenue
Monthly NBR tax revenue reached Tk28,027cr in the Oct 2025 print, up from Tk26,555cr a year earlier, within a Tk21,478cr–Tk52,720cr range.
The Oct 2025 reading sits mid-range; monthly collections peaked at Tk52,720cr and troughed at Tk21,478cr over the series.
Credit desk: the revenue base is seasonal and the latest plotted print is Oct 2025 — the Tk30,107cr borrowing calendar fills the gap.
WATCH
- ◆The early-October T-bill auctions that begin executing the Tk30,107cr calendar
- ◆Any NBR collection update to show whether the Tk4.15tn YTD figure is refreshing
- ◆The next government bank-borrowing print against the Jun 2026 Tk0.94tn read
RISK
- ▼Heavy December-quarter issuance crowding private credit and lifting the front end
- ▼A revenue shortfall widening the financing gap the borrowing calendar must cover
Iran War & Oil
Brent held above $100 through the week's close, pressuring the import bill.
Brent Crude
Brent climbed from $72.13 in early July 2026 to $102.31 by the 1 Oct reading, peaking at $108.35, a sustained near-$30 move over the quarter.
A roughly 40% rise since early July 2026; the 1 Oct reading sits just below the $108.35 peak.
Treasury: carry $100 Brent as the Q4 base case for import-financing lines; watch for a break below $100 or a retest of $108.
WATCH
- ◆Brent for a retest of the $108.35 high or a break back below $100
- ◆The October fuel-price decision after September's hike as crude stays elevated
- ◆H2 receivables on energy-importer credit lines for 60-90 DPD (days past due) stress as the refi cycle turns
RISK
- ▼Sustained $100+ Brent widening the import bill and draining reserve cover
- ▼Oil-driven non-food inflation reversing the disinflation and forcing an MPC hold
Oil set the backdrop for everything else this week. Brent held at $102.31 on the 2 Oct read, down from the $108.35 high struck this quarter but far above the $72 it opened July at. The transmission is direct: elevated crude drove September's fuel-price hike, it is the largest single input into the import bill that offsets the reserve build to $37.35bn, and it is the upside risk to a non-food inflation rate still at 9.32%. WTI at $92.87 leaves the Brent spread near $9.40, consistent with firm demand. The desk should carry $100 Brent as the base case for Q4 import-financing and inflation, and watch energy-importer receivables for 60-90 DPD stress as fuel costs work through the refi cycle. A break below $100 eases all three pressures; a retest of $108 tightens them.
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