Headlines
Financing posture hardens as the IPO pipeline signals a thaw.
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)
Rates on hold; cheap call money signals no near-term tightening need.
FX Reserves
Gross reserves climbed to $37.35bn by the Aug 2026 print from $33.19bn in Dec 2025, a rebuild of more than $4bn over the series.
Up from a $33.18bn series low near Dec 2025 to just under the $37.58bn window high.
Treasury: a rebuilt buffer underpins FX stability; watch whether the Sep print extends the climb or stalls below the $37.58bn high.
WATCH
- ◆Sep gross reserves refresh for continuation of the rebuild
- ◆overnight call money holding near 8.25% versus the 7.5% SDF floor
RISK
- ▼reserves print is Aug-dated — FX cover rests on a one-month-old read
- ▼a corridor hold while T-Bill yields near 9% keeps real funding costs firm
The rate structure now tells a consistent story. The policy corridor has held at 9.5% since the 30 July cut, the SDF floor at 7.5% and the SLF ceiling at 11.0%, while overnight call money has settled at 8.25% — below the repo and well inside the corridor, which says the interbank market is not short of cash. That ease shows up further out: the 364d T-Bill cleared at 8.95% on 28 Sep, down from above 10% earlier in the quarter, and the reserve buffer has rebuilt to $37.35bn on the Aug print from $33.19bn in Dec 2025. For the desk, the read is that funding costs have peaked and are drifting lower. The book can extend duration on the T-Bill roll while the front stays soft, but should watch the next reserves refresh and any pickup in private credit for the first sign the ease is turning.
Banking
NPL near peak on old prints; cheaper funding does not fix capital.
Overnight Money Market
DOMMR eased to 8.30% by the 4 Oct print from 10.09% in mid-Apr 2026, with BOFR tracking at 8.31% — both at series lows.
Down from a 10.65% peak over the window since mid-Apr 2026; the 4 Oct reading is the series low.
Treasury: overnight funding is cheap and stable, supporting the carry on the T-Bill roll; watch for any quarter-end spike.
WATCH
- ◆Q3 2026 NPL disclosure for whether the ratio holds near 32.78%
- ◆a CAR refresh past the Q3 2025 read to re-price system capital
RISK
- ▼NPL stock concentrated in state-owned banks — tail risk in few balance sheets
- ▼capital read is 370 days stale; the true buffer behind bad loans is unverified
The asset-quality and capital readings are both old, and that is the point for the desk. NPLs were 32.78% on the Q2 2026 print — a level that keeps roughly a third of system loans classified — and the latest capital read, CAR at 1.56%, dates to Q3 2025, 370 days ago. Nothing in this issue updates the provisioning picture. What has moved is the cost of money: DOMMR (Dhaka Overnight Money Market Rate) has eased to 8.30% and BOFR (Bangladesh Overnight Financing Rate) to 8.31% by the 4 Oct print, both down from above 10% in mid-April. Cheaper overnight funding eases the carry on holding bad assets but does not touch the capital shortfall behind them. The desk should price exposure to state-owned bank paper on the stale capital read, not on the comfort of soft funding, and position for the Q3 NPL print to confirm or break the plateau.
FX & External
Rate stable near 122.92; external cover rests on month-old flows.
External Flow Balance
Exports were $4.20bn in the Jun 2026 print, up from $3.35bn a year earlier; imports ran $6.78bn in Jul 2026, keeping the trade gap wide.
Exports have climbed from a $3.03bn series low to the Jun 2026 read, near the $4.78bn window high.
Treasury: remittance at $2.86bn in July funds part of the gap; watch Sep export data and the reserves refresh for cover.
WATCH
- ◆Sep reserves and export prints to confirm the external cushion
- ◆USD/BDT holding near 122.92 while the trade gap stays wide
RISK
- ▼export and import data is Jun–Jul dated; today's cover rests on lagged flows
- ▼gold near $4,162/oz signals global risk-off that can pressure flows
DSE Markets
Thin turnover and weak breadth; equities wait for the curve to ease.
DSEX Index
DSEX closed at 5,482.36 on 4 Oct, down 0.89% on the day and essentially flat over the year from 5,447.63 a year earlier.
The 4 Oct close marks a 7-session low (5,472.46 on 15 Sep the last lower close).
Equity desk: breadth weak at 66 up versus 291 down on thin BDT 543cr turnover; stay underweight until flow returns.
WATCH
- ◆turnover recovering above the thin BDT 543cr level as a flow signal
- ◆the 364d T-Bill and call money near 9% that compete for equity flow
- ◆breadth flipping back toward advancers from the 291:66 decline skew
RISK
- ▼index at a 7-session low with weak breadth points to further drift
- ▼high risk-free yields keep institutional flow in T-Bills, not stocks
The equity tape is telling a liquidity story, not an earnings one. The DSEX closed at 5,482.36 on 4 Oct, down 0.89% and at a 7-session low, with declines beating advances 291 to 66 on turnover of just BDT 543cr — among the thinner sessions of the run. Over the year the index is flat, up only from 5,447.63 a year earlier: a market that has gone nowhere while cash yields stayed high. That is the crux. With the 364d T-Bill clearing at 8.95% on 28 Sep, call money at 8.25% and FDRs in the same band, a saver earns close to 9% risk-free, and equities must beat that to pull flow. Until the front of the curve eases, the index lacks a liquidity bid. The desk stays underweight cash equities and favours the T-Bill roll for yield, waiting for turnover to confirm a flow turn before adding risk.
T-Bonds & T-Bills
Curve lower since July; a small 364d back-up at the last auction.
BD Govt Yield Ladder
Yields fell across the curve since Jul 2026 — the 364d T-Bill from 10.09% to 8.95%, the 10y from 10.24% to 8.54% by Sep 2026.
The 10y's Sep 2026 read of 8.54% is the series low; the 364d sits just off its 8.89% window trough.
Treasury: the curve repriced down 100–170bp since July; extend duration on the T-Bill roll while the front stays soft.
WATCH
- ◆the next T-Bill auction for whether the 364d holds above 8.90%
- ◆10y and 5y refreshes past their mid-Sep prints to confirm the long-end path
RISK
- ▼5y and 10y reads are 19–26 days old; the long end may have moved
- ▼a sustained short-end back-up would lift bank funding and FDR costs
Macro & Inflation
CPI at a 2026 low but non-food sticky; M2 growth the watch-item.
CPI Trend
The 12-month average CPI eased to 8.66% by the Jul 2026 print from 9.97% in Sep 2024; food inflation ran 8.6%, non-food 9.61%.
That 8.66% is the lowest since May 2026 (8.6% then), just above the 8.59% series trough.
Treasury: disinflation is slow and non-food sticky near 9.6%; the real policy rate stays modestly positive, so expect the MPC to hold.
WATCH
- ◆the Sep CPI print for whether non-food holds above 9%
- ◆private credit growth off the 4.98% Aug low as a demand signal
RISK
- ▼M2 at 11.76% — highest since Jul 2021 — risks re-accelerating prices
- ▼REER (Real Effective Exchange Rate) and credit reads are 2–7 months old; the real-rate picture is lagged
Remittance
Provisional Sep flash at $2.97bn keeps the dollar feed to reserves steady.
Remittance Inflow
Monthly remittance was $2.86bn in the Jul 2026 print, up from $2.42bn a year earlier; the series has ranged $2.42–3.76bn.
The $2.42bn a year ago (Aug 2025) was the series low; inflows have held well above it since.
FX: remittance remains a reliable dollar source backing reserves; watch whether the Sep flash confirms the seasonal step-up.
WATCH
- ◆the final Sep remittance revision against the $2.97bn flash
- ◆whether Oct inflows hold the step-up above the July $2.86bn print
RISK
- ▼the figure is a provisional flash; a downward revision would trim FX cover
- ▼a stronger taka can nudge inflows back toward informal channels
Fiscal
Collection running behind target; bank borrowing stays the fallback funding.
NBR Tax Revenue
Monthly NBR revenue was BDT 28,027cr in the Oct 2025 print, up from BDT 26,555cr a year earlier; the series has ranged BDT 21,478–52,720cr.
The Oct 2025 read sits mid-range, well below the BDT 52,720cr series high and above the BDT 21,478cr low.
Fiscal: monthly collection growth is modest YoY, which keeps revenue behind target and pressures government bank borrowing.
WATCH
- ◆a refreshed NBR monthly print past Oct 2025 to gauge the revenue run-rate
- ◆government bank borrowing past the Jun 2026 BDT 0.94tn read
RISK
- ▼a revenue shortfall widens the deficit and lifts domestic bank borrowing
- ▼borrow data is Jun-dated; the current claim on bank liquidity is unverified
Iran War & Oil
Brent up 40% since July; import bill and energy credit the exposure.
Brent Crude
Brent climbed to $102.25 by the 2 Oct read from $72.12 in early Jul 2026, a gain of over 40% in three months.
The climb has run from a $72.12 series low to just below the $108.35 window high.
Credit: a 40%+ Brent run lifts the import bill and energy-sector receivables; watch 60–90 DPD on fuel-exposed lines next refi cycle.
WATCH
- ◆Brent holding above $100/bbl and its effect on the monthly import bill
- ◆60–90 DPD on energy and fuel-import credit lines next refi cycle
RISK
- ▼sustained $100+ Brent widens the trade gap and pressures reserves
- ▼fuel-cost pass-through lifts non-food CPI, already sticky at 9.32%
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