This indicator is flashing red.

"Finance Minister Nirmala Sitharaman has said that the rupee has not weakened but it is the dollar that has strengthened, as she defended the 8 percent slide in the value of Indian currency against the greenback this year." BS. She also "asserted that the fundamentals of the Indian economy were strong and that inflation was low compared to other parts of the world". "Stung by decadal-high inflation, US Federal Reserve promptly turned hawkish. This, coupled with US economic strength and haven demand, has helped the US dollar notch multi-decade highs against prominent peers while the Indian rupee and pound are languishing around record lows." ET. The rupee has not plummeted even lower only because the Reserve Bank (RBI) "had to burn $110 billion in desperate attempt to arrest rupee's slump to a lifetime low, dragging the forex reserves to the lowest level in over two years." ET. "The market sees the greenback as the ultimate haven and experts suggest that amid worries of global recession fears and the ongoing Russia-Ukraine war, the bull run of the dollar is not yet over." The reason the dollar is "the ultimate haven" is because the US Fed is serious about controlling inflation and has raised its funds rate by 300 basis points since March. AA. Inflation means higher prices which also means that the currency is able to buy less than before. So the currency is weaker. "The RBI has now raised rates by a total of 190 basis points since its first unscheduled mid-meeting hike in May but inflation continues to remain stubbornly high." TOI. Yesterday, "RBI Monetary Policy Committee (MPC) member Jayanth R Varma said that the impact of monetary policy tightening on inflation will be felt after five to six quarters." TOI. Which means after one-and-a-half years. Why is the RBI so frivolous about controlling inflation? Because the higher the prices the higher the indirect tax collection. "From 44.4% in 2014-15 the share increased to 53.1% in 2020-21. Although there was a slight drop in 2021-22, indirect taxes' share of 50% in total collections was still about 5.6 percentage points higher than in 2014-15." TOI. One way the rupee could become stronger is if foreigners invested in Indian government bonds which would bring in dollars. "For months, India prepared for a remarkable milestone: getting its bonds listed on global indices." Bloomberg. "Banks penciled in inflows of as much as $40 billion for a country that has long lagged behind peers in tapping international wealth." But, "India has ruled out any changes to tax policies that will make it easier for the nation's bonds to be included in global indexes, according to people familiar with the matter." ET. Naturally, "JP Morgan has opted not to include India's government bonds in one of its flagship emerging market indexes after investors cited ongoing problems with capital controls, custody and settlement and other operational snags." Reuters. Mistakenly, "the government had hoped its 'Fully Accessible Route' (FAR) plan announced in March, which makes $115 billion of its bonds freely investible, would overcome these issues." The US Fed wants to protect Americans. The RBI is busy transferring citizens' money to the government. The rupee is an indicator. It's flashing red.