Decoupled already.

"The RBI (Reserve Bank of India) should 'pause and think' if it can continue mirroring the US Federal Reserve 'stroke-by-stroke' in terms of rate hikes or decouple from the American central bank, SBI (State Bank of India) group chief economic adviser Soumya Kanti Ghosh said." TOI. "Ghosh said he does not see an end to the rate hike cycle of the Fed in the short term, which makes a case for the RBI to contemplate about decoupling." In fact, "The Federal Reserve will likely need to raise interest rates more than expected in response to recent strong data and is prepared to move in larger steps if the 'totality' of incoming information suggests tougher measures are needed to control inflation, Fed Chair Jerome Powell told lawmakers." Reuters. "The three-month London interbank offered rate (Libor) for dollars, a major global lending benchmark, surpassed 5% for the first time in more than 15 years on 5 March." ET. The surge "has been driven by expectations for Fed policy tightening. Traders not only expect a higher terminal rate, but the Fed to stay at that level for a longer period than previously expected." "India Inc, which is already facing margin pressures, could be hurt if (US) interest rate stays higher, says UBS." ET. "According to the UBS, markets are more than fully pricing in three further Fed rate hikes to 5.5%, from the current level of 4.50% to 4.75%." "The dollar is at its highest level since 2000, having appreciated 22 percent against the yen, 13 percent against the Euro and 6 percent against emerging market currencies since the start of this year," wrote Gita Gopinath, Pierre-Olivier Gourinchas on October 14, 2022. One US dollar bought Rs 74.5133 on 1 January 2022, exchangerates. org.uk. The dollar is trading at Rs 81.91 this morning. xe.com. That is a fall of just over 10%. "On average, the estimated pass-through of a 10 percent dollar appreciation into inflation is 1 percent." Hence the more the rupee falls against the dollar in response to higher US interest rates the higher will be the inflation rate in India. "Indians are feeling the pinch of rocketing prices, passed on by companies across industries to save their margins from high input costs. As the low-to-mid income generating population largely feels the heat, consumption is seeing a sharp downturn, and household savings have slumped to a three-decade low." ET. That will hurt growth of the economy. "Specifically, foreign exchange intervention should not substitute for warranted adjustment to macroeconomic policies." That is IMF-speak for not trying to control inflation by trying to strengthen local currency by selling dollars, but by raising interest rates. "India's foreign exchange reserves rose for the first time in five weeks and stood at $562.40 billion as of the week ended March 3." ET. It had reached a record high of $642.453 billion in the week ended September 3, 2021. BS. So, RBI is selling dollars to support the rupee. Why is Ghosh asking RBI not to raise interest rate, against IMF advice? Because as bond prices fall and yields rise the SBI makes mark-to-market (MTM) losses on its investment in government and other bonds. Reuters. SBI is a government bank. So. the RBI and the SBI care more for the government than the nation or its people. This is India.