Stop playing games.

"Retail inflation in the US in May stood at 8.6%, the highest since December 1981. In the euro area which consists of countries using the euro as their currency, retail inflation in May was 8.1%," wrote Vivek Kaul. "UK inflation hit 9.1% year-on-year in May as soaring food and energy prices continue to deepen the country's cost-of-living crisis," CNBC. "The main bank rate currently sits at a 13-year high of 1.25% and the Bank (of England) expects CPI inflation to exceed 11% by October." If 1.25% is the highest interest rate in 13 years in the UK it shows that inflation has been subdued for all this time. With rare exceptions, inflation in India has been consistently higher than in the US and the world, worlddata.info. This is clearly shown in the value of the rupee against the dollar. At Independence in 1947, one dollar bought Rs 3.30, since when the buying power of the rupee has been falling relentlessly, except in 2007 when it appreciated to 39.42 to the dollar, before resuming its downward march, Thomas Cook. "India's retail inflation came down to 7.04% on an annual basis in May from 7.79% in April owing to easing food prices in the month of May," ET. The relatively higher inflation in the US hasn't halted the fall of the rupee against the dollar which is trading at 78.243 to the dollar, up from 77.382 on 02 June, in.investing.com. The reason is that the US Federal Reserve has been raising interest rates aggressively -- by 25 basis points (bps) in March, by 50 (bps) in May and by a whopping 75 bps in June, CNBC. Whereas, the Reserve Bank of India (RBI) raised its interest rate by 50 basis points in June, HT, after raising it by an inexplicable 40 basis points in an emergency meeting of the Monetary Policy Committee (MPC) in May, ET. Calling it an "off-cycle meeting" doesn't hide the panic reaction. Why it was playing games by hiking rates by 40 bps in an emergency is baffling. "Between June and August, the US Fed plans to suck out $47.5 billion per month. Post that, the plan is to suck out $95 billion per month," Kaul. As the US Fed tightens monetary policy the dollar will continue to appreciate against the rupee as foreign portfolio investors (FPIs) sell out of India. Since October 2021 FPIs have sold Indian stocks worth Rs 2.4 trillion, while domestic institutional investors (DIIs) have bought stocks worth Rs 2.8 trillion, thereby giving foreigners a profitable exit, ET. India's foreign exchange reserves fell by $4.599 billion to $596.458 billion, FE. As dollars leave, the rupee will fall. To support the rupee the RBI "appears to have ramped up intervention in the forwards market to slow the rupee's decline and preserve its hard-earned reserves". It "has run down its forward-dollar by $12 billion to $15 billion from about $64 billion in April", ET. Instead of selling today's reserves, it is selling tomorrow's reserves. "At the current spot levels, Bank of America expects the rupee to touch 81, revised from 79 earlier, by the end of the calendar year," ET. As the rupee falls prices will rise, and the rupee will fall further. Unless the RBI stops playing games.