Headlines
A cautious read as yields firm, remittance softens, and equity turnover stays thin.
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 near the floor signals ample system liquidity.
FX Reserves
Gross reserves rose to $37.35bn by the Aug 2026 print from $33.19bn in Dec 2025, with net reserves climbing to $32.44bn.
Both measures have built steadily over the thirteen-month series since December 2025, within $33.18-37.58bn, near the top of the range.
Treasury: a rebuilt reserve buffer supports the taka and import cover; watch whether the Aug $37.35bn level holds as oil costs stay high.
WATCH
- ◆Overnight call money relative to the 7.50% SDF floor
- ◆Reserve path after the Aug $37.35bn print
- ◆Next MPS for any shift in the 9.50% repo
RISK
- ▼A liquidity swing pushing call money toward the 11.00% SLF ceiling
- ▼Reserve drawdown if the import bill outpaces inflows
Banking
Capital and asset-quality prints are old; the stress they show is not.
Overnight Money Market
DOMMR eased to 8.44% by the 1 Oct print from 10.09% in mid-April, a decline of roughly 165bp.
Both overnight benchmarks have eased from the 10%+ readings of mid-April 2026, a near-two-point decline.
Treasury: overnight funding has repriced down roughly 165bp since April; the easing call-money regime supports carry but watch for a liquidity reversal.
WATCH
- ◆A CAR disclosure beyond the year-old Q3 2025 read
- ◆Concentration of NPLs in the state-owned commercial banks
- ◆DOMMR (Dhaka Overnight Money Market Rate) path for any funding-side reversal
RISK
- ▼Solvency gap at the weaker state-owned banks masked by stale capital data
- ▼Provisioning shortfalls surfacing at the next disclosure
The banking section carries two numbers that move at different speeds. Gross NPLs stood at 32.78% on the Q2 2026 print — roughly a third of system loans non-performing, concentrated in a handful of state-owned commercial banks. The only capital reading available is the Q3 2025 CAR at 1.56%, a full year old, so bank risk is being judged against an asset-quality figure that is current and a capital figure that is not. Recapitalisation steps taken over the past year are invisible in the data the desk can see. Overnight funding, by contrast, has eased — DOMMR down to 8.44% by 1 Oct from above 10% in April — so liquidity is comfortable even as solvency stays opaque. The desk should treat exposure to the weaker state-owned names as a solvency question and size counterparty lines to the stale capital read, not the easier funding backdrop.
FX & External
Taka firm, reserves ample; the export read is a quarter old.
External Flow Balance
Exports reached $4,202.69mn in the Jun 2026 print, up from $3,350.2mn a year earlier; imports ran $6,781.99mn in July, keeping a wide trade gap.
The Jun 2026 export read sits in the upper half of the two-year range; imports have climbed since mid-2024.
Treasury: export momentum funds the import bill, but the gap keeps FX demand firm; watch the Sep export print for direction.
WATCH
- ◆Sep export print to refresh the Jun $4.20bn read
- ◆USD/BDT mid-rate around 123 for any managed drift
- ◆Reserve path after the Aug $37.35bn print
RISK
- ▼Reserve cover eroding if imports outpace exports and remittance
- ▼REER (Real Effective Exchange Rate) strength on the Mar print weighing on export competitiveness
DSE Markets
Thin turnover and heavy decliners; cash yields out-compete equity risk.
DSEX Index
DSEX at 5,531.65 as of the 1 Oct print, barely above the 5,447.63 of a year earlier and well off the 5,926.28 annual high.
Now at a 5-session low (5,494.07 on 16 Sep the last lower close), roughly flat on the year.
Equity desk: a full year of range-bound trade with no net gain; stay selective until turnover and breadth confirm a trend.
WATCH
- ◆Turnover recovery above the BDT 1,000cr mark as a participation tell
- ◆364-day T-bill cut-off, 8.95% at the 28 Sep auction
- ◆Breadth: advancers versus decliners
RISK
- ▼Rising risk-free yields drawing flow out of equities
- ▼Thin turnover amplifying downside on any shock
The equity market is losing a contest it cannot win on current pricing. DSEX closed at 5,531.65 on 1 Oct, a 5-session low, and the tape is thin — turnover of BDT 723cr with 242 decliners to 85 advancers points to sellers meeting little demand rather than a sharp sell-off. The pressure traces to the yield curve. The 364-day T-bill cleared at 8.95% on 28 Sep, up from 8.47% at the prior auction, and the government has flagged BDT 30,107cr of bill and bond issuance for October to December. When risk-free paper pays close to 9% and the supply pipeline is firm, the opportunity cost of holding equities rises and marginal flow rotates into fixed income. For the market to find a floor, yields need to stabilise or earnings visibility needs to improve; neither is in hand today. The book stays underweight cash equities, with re-entry gated on a turnover recovery and a turn in breadth.
T-Bonds & T-Bills
The 364-day cut-off climbed to 8.95%; bond reads are weeks old.
BD Govt Yield Ladder
Monthly benchmark yields fell sharply from July: the 364-day to 8.95% by the Sep print from 10.09%, the 10-year to 8.54% from 10.24%.
The three-month July-to-September window shows a broad decline across tenors, with the long end falling fastest.
Treasury: the monthly curve eased through Q3, but the 28 Sep auction shows the front turning back up; expect bill cut-offs to stay firm.
WATCH
- ◆Next weekly T-bill auction cut-offs, 364-day at 8.95% on 28 Sep
- ◆Bond refresh: the 10-year last printed 16 Sep
- ◆The BDT 30,107cr Oct-Dec issuance calendar
RISK
- ▼Heavier government supply steepening the front of the curve
- ▼ALM (Asset-Liability Management) repricing risk on fixed-rate books if yields keep rising
The curve is sending two signals at once. On a monthly basis, benchmark yields fell hard through the third quarter — the 364-day from 10.09% in July to 8.95% by the September print, the 10-year from 10.24% to 8.54% — reflecting the easing that took the repo to 9.50% on 30 July. But the most recent auction, on 28 September, shows the front end turning back up: the 364-day cut-off rose to 8.95% from 8.47% a fortnight earlier. The reconciling factor is supply. The government has flagged BDT 30,107cr of bill and bond sales for October to December, and a firm calendar keeps upward pressure on short-tenor cut-offs even as the easing cycle holds. For the desk, the front of the curve is where the risk sits: fixed-rate books priced off the Q3 lows face repricing if auction yields keep climbing, while the long end — last printed 16 September for the 10-year — has not yet reflected the move.
Macro & Inflation
The 12-month CPI eased to 8.66%, yet non-food remains above 9%.
CPI Trend
The 12-month average CPI eased to 8.66% by the Jul 2026 print from 9.97% in late 2024, with the range bottoming near 8.59%.
The latest read is the lowest since May 2026 (8.6% then), extending a slow glide down from the 2024 peak.
ALCO: with the real policy rate at +1.24%, the easing CPI trend supports a hold at the next MPS rather than a further cut.
WATCH
- ◆Sep CPI print to confirm the 8.66% easing trend
- ◆Non-food inflation, stuck at 9.23% on the Aug read
- ◆M2 trajectory after the Jul print's 11.76%, highest since Jul 2021
RISK
- ▼Sticky non-food inflation stalling the disinflation
- ▼Fast M2 growth rekindling price pressure
- ▼REER (Real Effective Exchange Rate) strength on the Mar print eroding export competitiveness
Remittance
The September flash reads $2,970mn, provisional and subject to revision.
Remittance Inflow
Remittance ran $2,858.68mn in the Jul 2026 print, up from $2,421.9mn a year earlier, within a $2,421.9-3,755.1mn twelve-month range.
The twelve-month series bottomed at $2,421.9mn in Aug 2025 and peaked at $3,755.1mn before settling near $2,859mn by July.
Treasury: steady remittance underpins FX supply and reserves; watch the final September figure for whether the flash $2,970mn holds.
WATCH
- ◆Final September remittance to confirm the $2,970mn flash
- ◆Monthly inflow trend relative to the Jul $2,858.68mn actual
- ◆Pass-through to reserves and FX supply
RISK
- ▼A downward revision to the provisional Sep flash
- ▼Remittance softness pressuring reserve accumulation
Fiscal
Collection unchanged at BDT 4.15tn; the borrowing figure is a quarter old.
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 21,478-52,720cr range.
The series runs to the Oct 2025 print; monthly collections have risen modestly year-on-year off a low 2023 base.
Fiscal: a ~5.5% year-on-year revenue gain lags nominal growth, so the government leans on bank borrowing — watch the Oct-Dec issuance draw.
WATCH
- ◆Refreshed bank-borrowing data beyond the Jun BDT 0.94tn print
- ◆Execution of the BDT 30,107cr Oct-Dec borrowing calendar
- ◆NBR collection momentum against the FY target
RISK
- ▼Revenue shortfall widening the bank-financing need
- ▼Heavier government borrowing crowding private credit
Iran War & Oil
Brent at $102.29 keeps the import bill and refining costs elevated.
Brent Crude
Brent climbed to $102.29 by the 2 Oct print from $72.13 in early July, a rally of roughly 42%, after peaking at $108.35.
The three-month series runs from a $71.67 low in early July to the $108.35 high before easing back toward $102.
Credit: watch energy-importer and refiner receivables as fuel costs stay near $100; expect import-bill pressure into the next refi cycle.
WATCH
- ◆Brent around $100, off the $108.35 three-month high
- ◆Refiners' pre-Ramadan price-hike request
- ◆Pass-through to the fuel-import bill
RISK
- ▼An oil spike widening the import bill and pressuring reserves
- ▼Fuel-price pass-through reviving non-food inflation
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