Headlines
Growth downgrade and a wider trade gap frame a defensive FY27 open.
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; the overnight rate holds near the SDF–policy midpoint.
FX Reserves
Gross reserves rose to $37.35bn as of the Aug 2026 print, up from $33.19bn in Dec 2025; net reserves read $32.44bn.
The series peak was $37.58bn earlier in the window; the Aug read sits just below that high.
Treasury: the rebuilt buffer supports the peg, but the Aug read predates the live USD/BDT 123.20 — watch the September refresh.
WATCH
- ◆Next MPS for corridor guidance
- ◆Overnight call money drift versus the 7.50% SDF floor
- ◆The September reserve refresh after the Aug print
RISK
- ▼Reserve read five weeks old behind a live FX rate
- ▼Liquidity tightening if call money climbs toward the 11.00% SLF ceiling
Banking
Asset quality still impaired; overnight funding has eased since April.
Overnight Money Market
DOMMR eased to 8.08% by the 6 Oct read from 10.09% in mid-April; the Bangladesh Overnight Financing Rate (BOFR) fell to 8.18% from 10.42%.
Both rates sit at their series lows (8.08% and 8.18%) across the window that opened 15 Apr 2026.
Treasury: cheaper overnight funding eases rollover cost, but this is a liquidity signal, not a solvency one against the Q2 NPL stock.
WATCH
- ◆Q3 2026 NPL disclosure for direction off 32.78%
- ◆A refreshed system CAR to replace the Q3 2025 read
- ◆DOMMR trajectory off the 8.08% October low
RISK
- ▼Capital read a full year stale against a rising NPL stock
- ▼Provisioning drag on earnings if Q3 NPLs climb further
- ▼Funding re-tightening if DOMMR reverses off 8.08%
The banking section carries the system's tail risk, and its two headline reads sit at different vintages that must not be collapsed into one picture. The NPL ratio was 32.78% in the Q2 2026 print — a quarter old — while system CAR was last published at 1.56% for Q3 2025, now a full year stale. Read together only with that caveat: roughly a third of loans are non-performing against a capital base whose most recent official read is twelve months out of date. Against that, short-end funding has loosened — DOMMR has fallen to 8.08% on the 6 Oct read from above 10% in April — which eases rollover cost for banks but does nothing for the solvency question the NPL stock poses. The desk treats bank-sector credit exposure as capital-constrained rather than liquidity-constrained: the funding relief is real, the capital headroom is unverified, and the position should weight the latter until a fresh CAR print lands.
FX & External
Peg firm, buffer rebuilt; the external flow reads a quarter old.
External Flow Balance
Exports reached $4.20bn in the Jun 2026 print and imports $6.78bn in Jul 2026; remittance ran $2.97bn in Aug 2026.
Exports up from $3.35bn a year earlier (Jun 2025); imports off their $7.51bn series high.
Treasury: inflows outpace a year ago but the import bill still dwarfs them; the trade gap is the drain on the rebuilt buffer.
WATCH
- ◆September reserve refresh to replace the Aug print
- ◆FY27 trade gap trajectory after the 29% widening
- ◆USD/BDT drift off the 123.20 level
RISK
- ▼Reserve read five weeks old behind a live peg
- ▼Widening trade deficit draining the rebuilt buffer
- ▼Export figure a full quarter stale
The external accounts read better in trend than in freshness, and the desk should hold both facts at once. Gross reserves have rebuilt to $37.35bn in the Aug 2026 print from $33.19bn last December, and the inflows ran ahead of a year earlier — the Aug 2026 remittance series read $2.97bn against $2.42bn in Aug 2025, and Jun exports were $4.20bn against $3.35bn. Against that, imports were $6.78bn in the Jul 2026 print and the trade deficit widened 29% in the first two months of FY27, so the gap those inflows have to cover is growing. The peg has held at USD/BDT 123.20, and import cover sits near 5.5 months on the Jul read. The runway is adequate, not generous: the buffer rebuild is real but rests partly on reads five weeks to a quarter old, and the live trade gap is the variable to watch against the next reserve refresh.
DSE Markets
Index at a 10-session low; breadth and turnover both thin.
DSEX Index
DSEX at 5,424.91 as of the 6 Oct close, essentially flat over twelve months from 5,377.00 a year ago; range 4,703–5,926.
Now a 10-session low (5,379.00 on 14 Sep the last lower close), well below the 5,926.28 window high.
Equity desk: a year of net-flat index on thinning turnover signals low conviction; watch the 14 Sep floor for a trend break.
WATCH
- ◆Whether DSEX holds the 14 Sep 5,379.00 floor
- ◆Turnover recovery above the thin BDT 564cr
- ◆Breadth — the 270:79 decline/advance needs to narrow
RISK
- ▼Four-session drift from 5,530 extending on low volume
- ▼Thin turnover amplifying downside on any shock
T-Bonds & T-Bills
Short-end yields easing; the long end a few weeks stale.
BD Govt Yield Ladder
Across the Aug–Oct 2026 window, the 91d fell from 8.73% to 8.13% and the 10y from 9.23% to 8.54%; the 20y edged up to 9.35%.
The 91d sits at its three-month low (8.13%) as of the Oct 2026 print; the 20y at its high.
Treasury: short-end easing lowers rollover cost on bills, but a steepening long end signals term premium building; ladder duration accordingly.
WATCH
- ◆Next T-Bill auction for continuation below 8.13% at 91d
- ◆Refreshed 5y/10y prints to confirm the long end
- ◆Curve shape as the 15y/20y held above 9.3%
RISK
- ▼Long-end reads two to four weeks stale behind a moving short end
- ▼Curve steepening if the belly falls while the 20y holds 9.35%
Macro & Inflation
Disinflation slow; M2 growth the fastest since 2021 on the Jul read.
CPI Trend
CPI 12m-avg eased to 8.66% as of the Jul 2026 print from 9.77% a year earlier; food P2P 8.6%, non-food 9.61% (Jun 2026).
The 12m-avg is at its lowest since May 2026 (8.6% then), near the 8.59% series floor.
ALCO: with the real policy rate near +1.24%, shallow disinflation leaves little easing room; expect the corridor held pending a clearer CPI trend.
WATCH
- ◆September CPI for a fourth read off 8.66%
- ◆Non-food CPI holding 9.32% against easing food
- ◆The M2–private-credit gap after the Jul 11.76% print
RISK
- ▼Non-food inflation sticky at 9.32% capping disinflation
- ▼Thin +1.24% real policy rate on any inflation upturn
- ▼Private credit stalled at 4.98% signalling weak transmission
Remittance
Remittance holding near $2.97bn; the FX inflow stays the external anchor.
Remittance Inflow
Monthly remittance was $2,967.53mn as of the Aug 2026 print, up from $2,685.6mn a year earlier; the series peaked at $3,755.1mn.
The window opened Sep 2025 at $2,685.6mn; the latest plotted point is Aug 2026, with a $2,562.4mn trough.
Treasury: a steady ~$2.9bn inflow anchors the reserve rebuild and the peg; the trade gap, not remittance, now sets the FX runway.
WATCH
- ◆Confirmed September print versus the $2,970mn flash
- ◆Whether the run-rate holds the $2.9bn–$3.0bn band
- ◆Remittance feeding the next reserve refresh
RISK
- ▼Flash figure provisional, subject to revision
- ▼Run-rate flattening as the Eid-peak tailwind fades
- ▼Inflow needed to offset the widening FY27 trade gap
Remittance is the load-bearing line in the external account, and the September flash of $2,970mn confirms the run-rate rather than extending the Eid peaks. At +10.6% over September 2025's $2,685.6mn and flat against August's $2,967.53mn, the inflow is settling into a steady $2.9bn–$3.0bn band. That steadiness is the point for the desk: this is the inflow underwriting the reserve rebuild to $37.35bn in the Aug 2026 print and holding the peg at USD/BDT 123.20. The pressure sits on the other side — imports were $6.78bn in the Jul 2026 print and the trade deficit widened 29% in the first two months of FY27. Remittance plus a $4.20bn export run (Jun print) is covering that gap and leaving import cover near 5.5 months, but the margin is set by how fast the gap grows, not by the inflow. The book treats the FX runway as adequate and remittance-anchored, with the trade balance the variable to watch.
Fiscal
Collection and borrowing both carried over; no fresh fiscal read.
NBR Tax Revenue
Monthly NBR tax revenue last plotted BDT 28,027cr for Oct 2025, up from BDT 26,555cr a year earlier; series high near BDT 52,720cr.
The Oct 2025 read is the latest plotted point; monthly revenue ranges BDT 21,478cr to BDT 52,720cr across the series.
Fiscal desk: +5.5% YoY monthly revenue growth lags nominal GDP, keeping the collection gap and bank-borrowing reliance in focus into FY27.
WATCH
- ◆FY27 NBR collection update to replace the BDT 4.15tn carry
- ◆Government bank borrowing refresh off the Jun 2026 BDT 0.94tn
- ◆Monthly NBR revenue direction after the Oct 2025 BDT 28,027cr print
RISK
- ▼Both headline fiscal reads carried over without refresh
- ▼Borrowing figure a full quarter stale into FY27
- ▼Revenue shortfall pressure if NBR momentum stalls
Iran War & Oil
Brent at $100.84 keeps the energy import bill elevated into Q4.
Brent Crude
Brent rose to $100.84 as of the 6 Oct print from $78.98 in early July, a roughly $22 climb across the window.
The window opened 9 Jul 2026 at $78.98, bottomed near $75.98 and peaked at $108.35.
Risk: a sustained $100+ Brent lifts the import bill and non-food inflation; watch energy-importer credit lines on the next refinancing cycle.
WATCH
- ◆Brent holding above $100 versus the $108.35 window high
- ◆Pass-through to the FY27 energy import bill
- ◆Supply headlines moving the barrel off $100.84
RISK
- ▼Brent above $100 widening the energy import bill
- ▼Oil-linked pressure on the trade deficit into Q4
- ▼Fuel-cost pass-through to domestic non-food inflation
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