Still too high.

"Will the rise in inflation in most advanced economies be temporary or persistent," and "Will monetary-policy tightening by the US Federal Reserve and other major central banks cause a hard or soft landing?" asked Prof Nouriel Roubini. "There is ample reason to believe that the next recession will be marked by a severe stagflationary debt crisis," as "private and public debt levels are much higher than in the past, having risen from 200% in 1999 to 350% today." Markets are down 20% from their last peaks. "After all, in typical vanilla recessions US and global equities tend to fall by about 35%. But, because the next recession will be stagflationary and accompanied by a financial crisis, the crash in equity markets could be closer to 50%." Foreign portfolio investors (FPIs) have so far sold Rs 2.1 trillion worth of stocks, so that "Indian indices fell over 5% in June and about 9% so far this year," ET. When FPIs sell they repatriate dollars. Hence, "India's ballooning trade gap and capital outflows are raising new risks for the rupee, just as the currency's plunge to a record low adds to inflation woes," TOI. "While the Reserve Bank of India (RBI) has begun raising rates, which usually supports currencies, the moves also deflate the domestic stock market, and can accelerate rupee weakening outflows." Doing nothing risks inflation getting out of hand. The RBI has sold up to $40 billion to support the rupee, according to data from the RBI website, BI. The rupee could bounce back to 77 to the dollar in the next financial year. "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 that plunged to a fresh record." ET. In order to protect the rupee "The Center raised import taxes on gold, while increasing levies on exports of gasoline and diesel as it sought to control a fast-widening currency deficit." ET. This will be a huge incentive to smugglers. In December 2021, "The Customs officials at the Rajiv Gandhi International Airport in Hyderabad recovered and seized 1.19 kg of gold from a passenger who had concealed it in his rectum." India Today. It was valued at Rs 5.923 million. Love for gold is economic. In a paper by Renuka Sane and Manish Singh, "Analysing returns of financial assets between June 1999 and March 2021, they show that gold is an effective hedge against inflation. Inflation adjusted or real returns on gold have always been positive over this period," wrote Pramit Bhattacharya. Financial gymnastics would be unnecessary if the RBI followed the Fed's rate hikes, but "Raising interest rates makes borrowing dearer for the country's biggest debtor, the government. Tolerating inflation helps the government by lowering the real value of its interest outgo (interest payments adjusted for inflation)." wrote Bhattacharya. The rupee is not weak, wrote SAA Aiyar. "India's real effective exchange rate, measured by the 40-currency basket favored by the RBI, is overvalued by 4%." TOI. The government can control the RBI but not the rupee or the inflation. Whatever the financial contortions.