Going down.

"Sterling slumped to a record low on Monday (today), prompting speculation of an emergency response from the Bank of England, as confidence evaporated in Britain's plan to borrow its way out of trouble, with spooked investors piling into US dollars." Reuters. "The pound plunged nearly 5% at one point to $1.0327, breaking below 1985 lows." "The euro wobbled to a two-decade low at 0.9660 as risks rise of the war escalating in Ukraine, before steadying at $0.9686." "Black Wednesday refers to September 16, 1992, when a collapse in the pound sterling forced Britain to withdraw from the European Exchange Rate Mechanism (ERM)." Investopedia. George Soros made $1 billion betting against the pound and the Conservative Party of John Major lost the next general election in 1997 by a landslide. On 5 September 2022, Liz Truss won the Conservative Party election to become the Prime Minister of Britain by promising tax cuts. BBC. On 15 September, "The dollar reached as high as 7.0188 (Chinese) yuan in offshore trade, its highest since July 2020, and was last up 0.35% at 6.995." ET. The yuan, or renminbi, is trading at 7.15 to the dollar this morning, xe.com. On 7 September, "The US currency soared as high as 144.99 (Japanese) yen, hitting the level for the first time since August 1998. It is now within a large leap of its 1998 high of 147.43." Reuters. "The Indian rupee has held back very well against the dollar compared to other currencies, Finance Minister Nirmala Sitharaman said." ET. That is only because the Reserve Bank (RBI) has been selling dollars and buying rupees to keep it higher. It sold $5.22 billion in the week ending 16 September. ET. We don't know how much it sold last week. The idea is that a stronger rupee reduces prices of imports and keeps a lid on inflation. "A prolonged period of high and rising inflation weakens the rupee by hurting India's growth and competitiveness and a declining exchange rate sets of inflation because of higher import prices," wrote Deepa Vasudevan. "Sustained high inflation in the US means the Federal Reserve may continue to tighten rates," so the RBI should also keep pace with the Fed which will control inflation and "attract foreign investments and consequently dollar inflows, which will support the rupee". The problem is that the government won't allow the RBI to increase rates as it should, TIE, because of a mythical belief that low interest rates stimulate growth and economic growth wins elections. That high prices will hammer growth by stifling consumer spending seems to escape them. Keeping the rupee stronger than our competitors has consequences. "In 2021-22, the trade deficit between India and China rose to $72.9 billion." The Print. A weaker yuan will only make it worse by sucking in cheaper imports. How long can the RBI fight the dollar? "Amid a surge in US bond yields and the US dollar index, the rupee on Monday (today) opened 0.68% lower to hit a fresh record low of 81.55 against the greenback." ET. A finger in the dyke will fail. We need concrete. Action.