Headlines
Selling pressure dominates the tape; breadth deeply negative into dividend season.
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)
Policy on hold; money-market rates drifting toward the SDF floor.
FX Reserves
Gross reserves rose to $37.35bn by the Aug 2026 print from $33.19bn in Dec 2025; net reserves ran $32.44bn.
Up from the $33.18bn Dec 2025 start and off the $37.58bn window high over the 13-point series.
Treasury: net reserves up ~$3.9bn since Dec 2025 eases FX-intervention strain; watch the Sep print.
WATCH
- ◆Call money drift toward the 7.50% SDF floor
- ◆Next reserves print after the Aug 2026 $37.35bn read
RISK
- ▼Surplus liquidity feeding asset-price froth
- ▼Term premium widening if the 14-day rate climbs
Banking
NPLs near a third of loans; the capital picture awaits a fresh print.
Overnight Money Market
DOMMR eased to 8.23% by the 5 Oct print, down from 10.09% in mid-Apr 2026 — a 186bp slide in the overnight rate.
Overnight money has not been cheaper across the April-to-October window; 8.23% is the series low.
Treasury: cheaper funding aids carry, but the easing signals soft private credit demand, not a policy cut.
WATCH
- ◆Q3 2026 NPL disclosure for direction off 32.78%
- ◆A refreshed CAR print to replace the Q3 2025 read
- ◆Provisioning-gap coverage at the state-owned banks
RISK
- ▼Capital shortfall masked by the stale Q3 2025 CAR
- ▼NPL migration from restructured loans
- ▼Bad-loan concentration in a few balance sheets
The Q2 2026 NPL ratio of 32.78% describes a system where close to a third of advances are classified, and that stock has long been concentrated in a handful of state-owned commercial banks — so the headline overstates the strain at the private banks that fund most new credit. The money-market picture is the live counterpoint: DOMMR, the Dhaka Overnight Money Market Rate, printed 8.23% on 5 Oct against a 10.65% high over the April-to-October window, so overnight funding has cheapened sharply even as asset quality sits where it is. The gap to hold in view is capital: the 1.56% CAR is a Q3 2025 reading, over a year stale, so the buffer behind that NPL stock cannot be marked to today. Until a fresh capital print lands, treat provisioning coverage — not reported CAR — as the real constraint on new risk-weighted lending.
FX & External
Taka holding near 123; the external print is running old.
External Flow Balance
Exports reached $4.20bn by the Jun 2026 point, up from $3.35bn a year earlier; imports ran $6.78bn in Jul 2026.
The import line has stayed above exports across the 24-month window, holding goods trade in deficit.
Treasury: remittance at $2.97bn (Aug 2026) is the swing inflow covering the goods gap; watch the Sep flash.
WATCH
- ◆USD/BDT drift beyond the 123 band
- ◆Next monthly reserves and export refresh
- ◆Gold at $4,168/oz as a reserve-asset signal
RISK
- ▼Export momentum unconfirmed on the stale Jun 2026 print
- ▼Reserve drawdown if the import bill outpaces inflows
DSE Markets
Broad selling pushes the index to a 9-session low; 284 fall.
DSEX Index
DSEX at 5,445.27 on 5 Oct is barely changed from 5,423.64 a year ago, and well below the 5,926.28 window high.
The close marks a 9-session low (5,379.00 on 14 Sep the last lower close) within a year-long range.
Risk: a soft tape into dividend season; watch the 5,379.00 level — a break opens the 4,702.69 window low.
WATCH
- ◆Whether DSEX holds the 5,379.00 14 Sep floor
- ◆Turnover recovery to confirm a real bid
- ◆Breadth reversal off the 54:284 skew
RISK
- ▼Dividend-season drift pulling the index lower
- ▼Thin turnover amplifying downside gaps
- ▼Foreign-portfolio outflow on the weak tape
The 5 Oct close of 5,445.27 puts DSEX at a 9-session low, with 5,379.00 on 14 Sep the last print beneath it — the index is testing its recent floor, not breaking it. What marks the session is breadth: 284 decliners against 54 advancers is a near five-to-one skew, so the selling is market-wide, not concentrated in the heavyweights that move the headline. Turnover of BDT 537.12cr is light — a buyers' strike, with bids thinning ahead of dividend-declaration season rather than volume being dumped. The rate backdrop argues the other way: the 364-day T-Bill cut off at 8.59% on 5 Oct and call money sits at 8.11%, below the 9.50% repo, so funding is cheap and yields are falling. That equities cannot find a bid in that setting is the signal to weigh; until breadth turns, hold equity exposure light.
T-Bonds & T-Bills
The short end keeps falling; the long bond reads a few weeks stale.
BD Govt Yield Ladder
Yields fell across the curve: the 364-day to 8.59% from 8.89% in Aug 2026; the 10-year to 8.54% from 9.23%.
The front and belly of the curve are at or near their three-print low, set in the Oct 2026 read.
Treasury: short-end carry is compressing; stay short and resist terming out until a steepening catalyst appears.
WATCH
- ◆Next T-Bill auction for continued short-end easing
- ◆A fresh long-bond print to confirm the 8.54% 10y read
- ◆Curve steepening if the long end lags the short
RISK
- ▼Short-end rally running ahead of inflation data
- ▼Long-bond reads stale at two to three weeks
The 5 Oct auction cut all three T-Bill tenors — 91-day to 8.13%, 182-day to 8.37%, 364-day to 8.59% — extending a slide that has run since August, when the 364-day cleared near 8.89% and the 91-day near 8.73%. The move tracks the collapse in overnight money: call money at 8.11% now sits below the 9.50% repo, so cash is abundant and banks are bidding hard for government paper. For a treasury book that is a mark-to-market gain on existing holdings but a reinvestment problem — maturing bills roll into lower yields. On the monthly series the 2-year at 8.87% sits above the 10-year at 8.54% on the Oct read, a mild inversion through the belly, while the 15- and 20-year hold above 9.3%. A curve shaped like this rewards the wings over the belly; the desk should resist terming out into the two-to-ten segment for the thin pickup on offer.
Macro & Inflation
Headline CPI easing but non-food sticky; the prints are months old.
CPI Trend
The 12-month average CPI eased to 8.66% by the Jul 2026 point, down from 9.97% in Sep 2024 and near the 8.59% series low.
The reading is the lowest since May 2026 (8.6% then), extending a slide off the 10.34% window high.
ALCO: disinflation supports a hold, but M2 at 11.76% caps the room for the repo to fall further.
WATCH
- ◆Non-food CPI at 9.32% for stickiness in the next print
- ◆M2 growth off the 11.76% Jul 2026 pace
- ◆A fresh REER (Real Effective Exchange Rate) beyond the Mar 2026 102.78 read
RISK
- ▼Money growth outrunning the disinflation path
- ▼Private credit at 4.98% signalling weak investment demand
- ▼REER on the Mar 2026 print, now months old
Remittance
September inflows near $2.97bn on the flash, up from a year ago.
Remittance Inflow
Monthly remittance was $2.97bn in the Aug 2026 point, up from $2.69bn a year earlier; the series peaked at $3.76bn.
Inflows have held above the $2.56bn floor and below the $3.76bn peak over the trailing twelve months.
Treasury: remittance remains the primary dollar inflow cushioning the trade gap; watch the confirmed Sep figure.
WATCH
- ◆Confirmed Sep 2026 remittance against the $2.97bn flash
- ◆The festival-season inflow trend into Q4
- ◆Remittance share of external financing versus exports
RISK
- ▼Flash figure revised lower on confirmation
- ▼Informal-channel leakage if the kerb spread widens
Fiscal
Fiscal data is running old; the borrowing figure dates to June.
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 peaked at BDT 52,720cr.
The Oct 2025 reading sits well off the BDT 52,720cr series high and near the BDT 21,478cr low.
Fiscal: a monthly run-rate near BDT 28,000cr keeps collection short of target; watch the next NBR release.
WATCH
- ◆Next NBR monthly collection update off BDT 4.15tn
- ◆A refreshed bank-borrowing figure beyond the Jun 2026 BDT 0.94tn
- ◆NBR revenue run-rate against the FY target
RISK
- ▼Revenue shortfall widening the deficit financing need
- ▼Heavier bank borrowing crowding private credit
Iran War & Oil
Brent holds the $100 line; import-cost pressure stays on.
Brent Crude
Brent closed at $100.04/bbl on the 5 Oct print, up from $76.24 in early Jul 2026 — a 31% climb over the window.
Crude has risen from a $75.98 window low in Jul 2026 and sits just off the $108.35 high.
Risk: sustained $100 crude widens the import bill; watch energy-importer receivables on the next refi cycle.
WATCH
- ◆Brent sustaining above $100 into the next refi cycle
- ◆Pass-through to the fuel import bill and subsidy
- ◆Crude's drag on import cover off the 5.5-month Jul read
RISK
- ▼Higher crude widening the trade deficit
- ▼Energy-importer credit lines slipping into 60-90 day arrears
- ▼Reserve drawdown if the oil bill climbs
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