Headlines
Debt rising, FDI falling, yields below 8% — the external signal weakens.
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; ample liquidity keeps the overnight rate near the floor.
FX Reserves
Gross reserves rose to $37.35bn by the Aug 2026 print from $33.19bn in Dec 2025, holding near the series peak of $37.58bn.
Reserves climbed roughly $4bn over the eight months from the Dec 2025 start of the series.
Treasury: reserves keep rebuilding, but the Aug print trails spot by six weeks — wait for the next release before trusting the climb.
WATCH
- ◆Call money drifting off the 7.66% floor as the first sign liquidity is tightening
- ◆The 14-day rate at 8.61% against overnight 7.66% as a read on term funding
- ◆The next reserves print to confirm the climb past $37bn holds
RISK
- ▼The overnight rate pinned near the floor signalling weak credit demand rather than policy comfort
- ▼Reserve data lagging spot by six weeks behind an easing front-end
Banking
Asset quality stress persists on the Q2 print; funding costs have eased.
Overnight Money Market
DOMMR eased to 7.66% and BOFR to 7.69% by the 11 Oct print, down from 10.09% and 10.42% in mid-April.
Both interbank rates have fallen close to three points since the series began on 15 Apr 2026.
Treasury: cheaper interbank funding lifts loan-book spreads near-term, but the easing does not touch the stock of impaired assets.
WATCH
- ◆The Q3 2026 NPL disclosure, due to update the 32.78% Q2 figure
- ◆Whether a refreshed CAR print lifts the 1.56% Q3 2025 read off its trough
- ◆DOMMR holding near 7.66% as funding-cost relief for the weaker banks
RISK
- ▼Provisioning shortfalls eroding capital further before the next CAR disclosure
- ▼A rising provisioning burden crimping lending capacity even as funding costs fall
The banking section's two headline reads are old — the NPL ratio of 32.78% is the Q2 2026 print and the CAR of 1.56% dates to Q3 2025 — so neither captures the sharp move in funding markets since. DOMMR has fallen from 10.09% in mid-April to 7.66% on 11 Oct, and BOFR has tracked it down to 7.69%, close to a three-point drop in interbank rates over six months. For banks, that cuts the cost of wholesale funding and widens the spread on existing loan books. It does nothing, though, for the stock of bad loans: a 32.78% NPL ratio means close to a third of the system's credit is impaired, and the capital ratio measured against it was last read at 1.56% in Q3 2025. The desk reads this as a sector where margins may hold up near-term on cheaper funding, while solvency rests on data we have not seen refreshed since Q3 2025.
FX & External
Taka steady and reserves firm on the Aug print; trade gap persists.
External Flow Balance
Monthly exports came to $4.20bn in the Jun 2026 print, about 25% above the $3.35bn booked a year earlier, while imports held near $6.78bn on the Jul read.
Exports have risen from $3.35bn in Jun 2025 and sit below the series peak of $4.78bn.
Treasury: export growth narrows the trade gap, but imports near $6.78bn keep remittances the decisive funding leg for reserves.
WATCH
- ◆USD/BDT 123.16 for any drift as reserve data lags six weeks behind spot
- ◆The next exports print to update the stale $4.20bn Jun figure
- ◆Remittance covering the trade gap as the swing factor in the external account
RISK
- ▼A monthly trade gap near $2.6bn on the latest export and import prints pressuring the account if remittances soften
- ▼Reserve adequacy resting on a six-week-old Aug print
DSE Markets
Soft tape; cheap money isn't finding the equity bid yet.
DSEX Index
DSEX ended at 5,451 on the 11 Oct print, up 4.8% from 5,202 a year earlier but off the 5,926 cycle high.
The latest close marks a 3-session low (5,424.91 on 06 Oct the last lower close).
Treasury: with the one-year range 4,703–5,926, the index sits mid-band; watch a break of 5,425 support before adding beta.
WATCH
- ◆Turnover below Tk 569 crore as the marker of sidelined institutional demand
- ◆Whether DSEX holds the 5,425 support that marked the 06 Oct low
- ◆T-bill cut-offs below 8.60% pulling allocation toward equities as the fixed-income hurdle falls
RISK
- ▼Persistently thin turnover leaving the index vulnerable to small-order swings
- ▼Soft breadth broadening into index names if credit demand stays weak
DSEX closed at 5,451 on 11 Oct, a three-session low, and the breadth told the clearer story — 264 stocks fell against 79 that rose, on turnover of just Tk 569 crore. The backdrop should favour equities: the 91-day T-bill cut off at 8.13% on 05 Oct, call money sat at 7.66% on 11 Oct, and liquidity is ample. Cheaper money usually pushes investors out of deposits and into shares. That rotation is not happening. Private credit grew 4.98% YoY on the Aug print and net FDI fell 28% in H1 2026, so the cheap money is sitting in short government paper rather than moving into risk. Until an earnings or confidence catalyst appears, index gains stay capped and the tape rewards selective large-caps over broad exposure.
T-Bonds & T-Bills
Short and belly yields keep falling on ample liquidity; long end firms.
BD Govt Yield Ladder
The 91-day T-bill yield fell to 8.13% by the Oct 2026 point from 8.73% in Aug, while the 2-year dropped to 8.25% from 9.39%.
Since the Aug 2026 start of the series the short end has fallen while the 20-year firmed to 9.35%.
ALCO: value is moving out the curve — short carry thins while 15-to-20-year duration still pays near 9.35%.
WATCH
- ◆The next T-bill auction for whether sub-8.60% cut-offs continue
- ◆Fresh 5y/10y quotes to update the Sep prints and confirm the flat curve
- ◆The 15y/20y segment, which firmed to 9.34% while the short end fell
RISK
- ▼A flat one-to-ten-year curve squeezing bank carry on duration
- ▼Long-end yields drifting up on supply as the short end eases, steepening the back
The front of the curve keeps falling. The 91-day T-bill cut off at 8.13% on 05 Oct, down 15bp from the prior auction, and the 364-day printed 8.59%, down from 8.95% a month earlier. On the monthly series the two-year has dropped to 8.25% from 9.39% in August, and the five- and ten-year sit at 8.65% and 8.54% on their September prints. Short and belly yields are compressing because liquidity is ample and credit demand is soft, so banks with idle cash are bidding government paper down. The long end tells a different story: the 15-year and 20-year firmed to around 9.34%, so the curve is steepening at the back even as it falls at the front. For the desk, carry on short paper is thinning while duration at the long end still pays — the value has moved out the curve, and the ALCO case for adding 15-to-20-year exposure is building.
Macro & Inflation
Headline inflation eases on the Aug print; non-food and M2 keep upside risk.
CPI Trend
The 12-month average CPI eased to 8.66% by the Jul 2026 point from 9.97% two years earlier, with food p2p at 8.6% and non-food 9.61%.
The latest 12-month reading is the lowest since May 2026 (8.6% then), down from a 10.34% peak in the series.
Treasury: with the real policy rate still positive on the Aug read, the MPC has room to stay on hold while non-food inflation sits near 9%.
WATCH
- ◆The Sep CPI release to confirm the 8.66% 12-month average keeps falling
- ◆Non-food inflation at 9.32%, the sticky component holding headline up
- ◆M2 at 11.76% on the Jul print as a lead on future price pressure
RISK
- ▼Sticky non-food inflation stalling the disinflation and delaying rate cuts
- ▼M2 growth near a multi-year high feeding back into prices
Remittance
Inflows eased to $2.77bn on the Sep flash, still above a year ago.
Remittance Inflow
Monthly remittances were $2,967mn at the Aug 2026 chart point, up from $2,685mn a year earlier, within a $2,562–$3,755mn range.
The chart runs to the Aug 2026 print, one month behind the provisional Sep flash of $2.77bn.
Treasury: inflows peaked at $3,755mn in the series; the softening to the Sep flash narrows the offset to the trade gap.
WATCH
- ◆The final Sep remittance data to confirm or revise the $2.77bn flash
- ◆Whether inflows hold above $2.7bn into the next months
- ◆Remittance as the offset to the $2.6bn monthly trade gap
RISK
- ▼A sustained slide below $2.8bn thinning the external-account cushion
- ▼Informal-channel leakage if the spread to curb rates widens
Fiscal
Revenue reads flat and borrowing data is stale on the Jun print.
NBR Tax Revenue
Monthly NBR tax revenue read BDT 28,027 crore in the Oct 2025 print, up about 6% from BDT 26,555 crore a year earlier.
The latest plotted point is the Oct 2025 print, so the chart runs a year behind today's YTD headline.
Treasury: the plotted revenue series lags a year; the flat BDT 4.15tn YTD figure is the live read on collection.
WATCH
- ◆The next NBR monthly release to break the flat BDT 4.15tn YTD read
- ◆Updated bank-borrowing data to refresh the Jun 2026 BDT 0.94tn figure
RISK
- ▼A revenue shortfall versus target forcing heavier bank borrowing into a low-yield market
- ▼Stale fiscal data obscuring the true pace of government financing
Iran War & Oil
Brent near its cycle high keeps the energy import bill heavy.
Brent Crude
Brent climbed to $104.72 by the 09 Oct chart point from $84.14 in mid-July, a near 24% rise, within a $78.34–$108.35 range.
The latest point sits just below the $108.35 high reached over the three months since 14 Jul 2026.
Risk: crude near its high keeps import-cost and inflation pressure live; watch energy-importer receivables on the next refi cycle.
WATCH
- ◆Brent testing the $108.35 three-month high as the import-cost trigger
- ◆Pass-through to the next import bill and the trade gap
- ◆Energy-importer credit lines for receivables stress if crude holds above $100
RISK
- ▼Sustained crude above $100 widening the trade deficit and pressuring reserves
- ▼Fuel-price pass-through reviving non-food inflation already at 9.32% on the Aug print
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