Losing propositions.

"Inflation may ease gradually in the second half of 2022-23, Reserve Bank of India (RBI) governor Shaktikanta Das said on Saturday, asserting that the central bank will continue to calibrate its policies with the goal of preserving and fostering macroeconomic stability." TOI. "India's policy makers and consumers will be cheering a steep slump in commodities, especially palm oil, which could bring about a few months of 'surprisingly low' food inflation." ET. "Sentiment in the commodities market has soured due to fears of recession in major economies. Crude oil has dropped about 20% since a peak in March, soybean has lost a third of its value since April, while wheat and corn have also declined." Major economies are also the destinations for India's meager exports, so a recession in those means that we will earn less foreign exchange. "Order books for Indian exporters have begun shrinking as inventories pile up in key destinations on low demand. Order books have shrunk 15-20% for leather and footwear, while in yarn, volumes have witnessed a sharp 70% fall." ET. As a result, "India's trade deficit swelled to a record $25.63 billion in June driven by imports of petroleum, coal and gold, and slow exports, raising concerns about a further slide in the rupee and a bigger current account deficit (CAD)." ET. "The Center's raft of measures to improve the trade balance will unlikely arrest the rupee's fall with India's current account deficit, or excess of imports over exports, set to more than double in FY23." ET. Nomura forecasts a fiscal deficit of 6.8% of GDP and CAD at 3.3% of GDP in 2022-23. What are the "raft of measures" designed to help the rupee? "India will impose restrictions on the export of flour in a fresh move to insulate domestic markets from the global wheat crisis." NDTV. "India banned all exports of wheat grain without government approval in May." "India's steel exports is expected to come down by 40 percent to 12 million tonnes (MT) in the ongoing fiscal, as a result of the duty-related measures taken by the government last month, according to Crisil." ET. "The government...raised export duty on diesel by Rs 13/liter and that on petrol by Rs 6/liter. The government also imposed a cess of Rs 6 per liter on exports of ATF (Aviation turbine fuel)." ET. The objective is to increase domestic supplies but prices will stay the same. All these measures are meant to keep domestic prices down. "India's foreign exchange reserves depleted by $5 billion in the week ended July 1, as foreign portfolio investors continued withdrawing investments from local equities leading to the rupee's slide to 79 per dollar for the first time in history.' ET. To stem the rupee's fall the RBI has allowed banks to offer higher interest rates on foreign currency deposits, allowed foreign funds to buy more government bonds and allowed companies to borrow more in foreign currencies. TOI. Will these measures work? The next meeting of the Federal Open Market Committee is on 26-27 July, Calendar, at which time they are expected to raise rates by another 75 basis points because the US economy added another 372,000 jobs in June, Reuters. The rupee will fall further and inflation will zoom. Unless the RBI gets serious about interest rates. They'll lose. Big.