Down 36%.

In February, "The Reserve Bank of India's (RBI's) rate-setting panel, Monetary Policy Committee (MPC),... kept the repo rate unchanged at 6.5% for the sixth time in a row." "In addition, the central bank also left its inflation forecast for FY24 unchanged at 5.4%, despite food price rise concerns and uncertainty around crude cost." ET. "With the inflation trajectory coming down of late, there is a view that the repo rate should be cut. The argument given is that if this is not done, economic growth will get affected." However, "In the last 13 years starting from 2011-12, the repo rate has been above 6% in 10 years and at 4-4.4% in 3 years (during Covid)," and the real repo rate, which is the nominal interest rate minus the CPI inflation rate, (Investopedia) "was negative for 6 years, above 1.5% in 5 years, and 1% in one year." Growth in credit was 10.3% and GDP growth was 7.4% from 2014-15 to 2018-19 when the repo rate averaged 2.1%, but growth in credit fell to 8.8% and GDP growth averaged only 3.6% during Covid from 2019-20 to 2022-23 when the real repo rate was -1%. Credit growth is 16% this year the GDP is expected to grow 7.6% when the real repo rate is 1%. Therefore, the present repo rate at 6.5% is correct, concluded Madan Sabnavis. India's consumer price index (CPI) inflation was at 5.10% in January 2024 (TOI) and the RBI is predicting it at 5.4% for the full financial year. The RBI has been asked by the government to maintain CPI inflation at 4% with an occasional deviation of 2% on either side. ET. However, "India Core CPI Change was reported at 3.594% in January 2024." It fell from 3.888% in December 2023. CEIC. Since the inflation rate is calculated over the previous year, the rise in prices has been compounding. Which means that, with prolonged periods of negative real rate of interest, "Rs 1,00,000 in 2001 is worth just about Rs 27,000 now, all thanks to inflation". Value Research. That has eroded the buying power of the rupee and affected purchasing power of citizens, especially the poor. Hence, "The domestic fast-moving consumer goods  (cleartax) (FMCG) sector is poised for a period of 'subdued' growth up until the September quarter of the current calendar year, as per market research firm Kantar, highlighting the challenges of India's consumption story," Mint. Aided by the RBI's obdurate neglect of inflation, the rupee has collapsed from 60.95 in 2014, when this government first grabbed power, to 81.62 in 2022 against the US dollar. Forbes. One dollar buys Rs 82.72 today, a gain of 36%, (xe.com) after touching an all-time high of Rs 83.48 against the rupee on 11 November 2023. BS. So, "Gold has been a steadfast go-to option for investors and savings world over, especially in India. Not just investors, central banks have long banked on gold, its allure both reassuring and constant," wrote Somnath Mukherjee. When the rupee buys 36% less, don't spend on FMCG. Buy gold.