They want the same thing.

Like the 1981 horror movie The Hand (wikipedia), the horrific, shadowy 'Foreign Hand' (Indian Currents)  has been haunting Indian governments since shortly after Independence. Even as, "Security agencies have stepped up their vigil over the Cockroach Janta Party (CJP) movement amid intelligence assessments flagging the possibility of foreign interference. Several social media accounts allegedly linked to Pakistan, more than 4,000 social media posts and profiles, and over 500 accounts of being operated from outside India are under scrutiny." "According to intelligence assessments, funds are being mobilized for the movement through various channels." ABP. Pakistan and unnamed others are plotting against this beloved Indian government. What an intelligent assessment! What about BJP's interference in foreign countries? "Overseas Friends of the BJP (OFBJP) was formed about 13 years ago; it has units in USA, UK and Canada. It has been striving to project positive and correct image of India and BJP to the Western world, and correct the distortions and false image of BJP created by its adversaries." BJP. Are they not raising money as well? An American singer Mary Milliben, who has never been to India, but is apparently an ardent supporter of Prime Minister Narendra Modi (wikipedia) "alleged that the CJP was being funded by US-based donors opposed to PM Modi and urged young Indians to organize peaceful protests against what she described as the party's 'disruptive spirit'." TN. Ms Milliben may relax. The Indian government uses a wide range of weapons from batons to tear gas, from water cannons to pellet guns (Reuters) against unarmed citizens. When the UNHRC expressed concern on mass detentions of protesters, journalists and lawyers and called for restraint (ANI) India's instant brusque response was that its advice was "misplaced" and an "interference in internal matters" (HT). "Detained protesters said that police personnel beat them, hit their private parts, snatched away many of their phones, and deleted photos and videos of the protests from their phone galleries." The Wire. "An NSUI protester from Kerala has alleged that Delhi Police personnel punched him in the face, kicked him in the chest, back and private parts, and strangled him inside a police vehicle after he was detained during protests demanding the removal of Chief Election Commissioner Gyanesh Kumar." He also "alleged that four boys aged 16 and 17 were subjected to similar treatment inside the vehicle, despite not having participated in the protest." India Today. We understand this fascist regime will do anything to hang on to power and as their crimes multiply so does the necessity of staying in control. But why do the police resort to such brutality? The protesters come from the same towns and villages as police personnel, so why the ferocity? Because they want to protect that most prized possession in India - a government job. "A government post offers iron-clad job security, wages well above comparable private sector roles (for instance a government-employed driver may earn four times higher), generous health and pension benefits, high social status and authority even at the lowest rungs of the bureaucracy," wrote Ajit Ranade. Young people spend years appearing for selection examinations for government jobs. In September 2024, 6,000 post-graduates, nearly 40,000 graduates and 120,000 candidates who studied up to Class 12, applied for the post of sweepers "to clean offices in Haryana govt departments, boards, corporations and civic bodies." TOI. The educated protesters rightly blame the government for a jobless economy, leaks of exam question papers (wikipedia) and election fraud. They want a change for a better future. The police understand the regime wants all protests to be crushed, never mind the cost, and will punish anyone seen to be soft on the protesters. Both are fighting for their lives. The regime is destroying both.    

We should offer the fig leaf.

"The International Monetary Fund (IMF) has raised India's gross domestic product (GDP) growth forecast for 2026-27 by 60 basis points (bps) to 7%, citing resilient domestic demand and robust services activity." "In its latest World Economic Outlook, the IMF also raised its growth projection for FY28 by 30 bps to 7%." BS. India has signed trade agreements with at least 14 countries, known as PTA, CECA, CEPA and CECPA, which are probably not fully free, and Free Trade Agreement (FTA) with New Zealand, Sri Lanka and Thailand. wikipedia. A BTA, or Bilateral Trade Agreement, with the US is frozen. "US Trade Representative Jamieson Greer said he did not think there was 'something imminent' on the trade deal with India and the two sides have identified 'the universe of items' that are sticking points." ET. Agreeing with Green, "Finance Minister Nirmala Sitharaman said that the India-US trade deal talks have hit a plateau, beyond which giving or taking might be 'very,very' difficult." TIE. Trade talks "in the past months have met with complications, most recently a new US law that paves the way for up to 100% tariffs on Indian goods because of New Delhi's purchase of Russia oil." "A deal has also been held back because Washington is yet to complete a Section 301 trade investigation on several nations over alleged excess industrial capacity." Reuters. However, the picture changes fast where US President Donald Trump is involved. "Trump is facing a growing backlash over plans to import diesel from Russia as the Iran war continues to impact global energy prices." "As well as the initial release of 300,000 tonnes of diesel, Trump said Russia would then supply 500,000 tonnes in November and one million more after that." BBC. In an effort to surpass the US economy, "Beijing has been over investing for years, but lately, it has been dumping the excess output it can't sell at home. In the past, export volumes rose with prices; this decade, Beijing has dropped export prices nearly 20%, producing a 40% surge in volume." Combined with weaker imports, China's trade surplus jumped 20% last year to a record $1.2 trillion, wrote Ruchir Sharma. Unfortunately, "The US will remain reliant on China for its rare earths well into the 2030s even as it builds its own mining and processing facilities." "While US output of the two most-commonly used rare earths has more than tripled since Trump returned to office last year, the country can meet only 42% of its demand and within five years will still rely on imports for nearly a quarter of its demand." Reuters. India does not have a rare earth industry nor the efficient productivity to triple production within one year to entice the US. Also, "Events including a US military attack on a ship off Oman that killed three Indian seafarers and India rejecting Trump's repeated claim of brokering a ceasefire with Pakistan have hurt relations." Trump is referring to Operation Sindoor on 7 May 2025, in which India attacked Pakistan  (wikipedia) in retaliation for the terrorist attack at Pahalgam in Kahsmir on 22 April 2025 in which 26 unarmed civilians were gunned down (wikipedia). In August, Air Chief Marshall AP Singh said "India downed five fighter aircraft of Pakistan during Operation Sindoor." newsonair.gov.in. No mention of India's losses. This lack of honesty allows Trump to fill the void with his claims. The trouble is that India does not obey rules. "Licensed categories like aviation are rife with policy puzzles. Asset shifts have been wrapped in riddles in fields like e-commerce and infrastructure." "In recent years, though, India has had a boom in outgoing investments, with both foreign and domestic industrial houses investing abroad." Mint. It will be suicide for Republicans if Trump buys diesel from Russia. India should offer to buy crude from Russia, refine it to diesel and supply the US. We get the crude, Putin gets his cash, Trump gets his diesel and the fig leaf stays in position. Comparing sizes of the leaves will not be allowed. We don't take questions.  

It's not food.

"India's retail inflation quickened to 5.54% in September 2026 from 4.83% in August, driven by a sharp rise in food prices, particularly vegetables, according to government data." "The central bank also raised its inflation forecast for FY27 to 5.2% from 5.0% earlier, citing higher crude oil prices, elevated food costs and the impact of weaker rupee on imported inflation." ET. Emphasis on food prices is a regular cop-out for doing nothing because food prices are supply dependent and monetary policy cannot increase supplies. The big secret is that the government is actively creating shortages of sugar and grains by diverting them for ethanol production to reduce import of crude oil. "Between 2019-20 and 2025-26, ethanol supplied to oil marketing companies grew at approximately 38% annually, while maize production grew at 11.4%, sugarcane at 5.1% and rice at 4.4%." Maize is essential for the poultry industry and diversion of maize to ethanol production is raising prices of eggs and chicken. "The same applies to livestock and diary producers." "The starch and food-processing industries face a similar problem." Indic Collective. As more land is diverted to sugar and maize production there is less for growing vegetables. The precipitous fall of the rupee from 62.33 to one dollar in 2014 (bankbazaar.com) to 96.795 to one dollar on 08 October (in.investing.com), makes imports that much more expensive. In a belated effort to be seen to be doing something the RBI raised the cost of borrowing by a token 25 basis points (bps) to 5.50% last week. TOI. Just as the RBI has failed to control inflation it has failed to control the cost of borrowing for the government. "Indian government bonds tumbled yesterday, with the benchmark 10-year yield posting the biggest one-day rise in over six months," as the "6.94% 2036 bond yield surged nearly 9 bps to 7.3857%, a three-year peak." ET. Clearly, the bond market has no faith in the RBI's ability to control inflation in the medium term. To support the rupee the RBI announced a dollar swap which drew in a total of $136.4 billion, of which FCNR(B) deposits at very high rates of tax-free interest contributed $127.2 billion. Mint. However, the rupee was at 95.11 to one dollar on 31 August, the closing day of the scheme, but continued falling to over 96 to the dollar. mumbaiport.gov.in. Foreign Exchange reserves fell from $785.71 billion on 4 September to $734.6 billion on 2 October, suggesting the RBI had spent about $50 billion on buying rupees to support the currency. BT. When that did not work, the RBI "announced a series of measures to ease pressure on the rupee, tightening rules for foreign exchange derivatives, restricted forward hedging of the currency and mandated that "authorised dealers will have to maintain a cash reserve with the RBI equal to 20% of the rupee equivalent of the notional amount of each eligible transaction." ET. The RBI "announced a special window to meet the entire daily dollar requirements of three public sector oil marketing companies (OMCs). NDTV. As the rupee appreciated to 95.755 on 12 October from 96.755 on 09 October, the RBI restricted the rupee non-deliverable forward window only for hedging. ET. The RBI probably wants to stop banks and companies buying dollars with the stronger rupee for use in the future. Large scale dollar buying will again weaken the rupee. "Prasanna Tantri, associate professor of finance at the Indian School of Business, has warned that India cannot sustain zero real interest rates for too long. He warned that the RBI's efforts to defend the rupee and keep interest rates artificially low through monetary easing risk fueling inflation and undermining financial stability." BT. The RBI failed to defy the 'Impossible Trinity' (wikipedia) and prefers to control the movement of currency while trying to keep the interest rate low and the rupee high. Will it succeed? Depends on foreign investors and the bond market. Stop blaming food. They are not buying it.      

Invent clever lies please.

 "An executive magistrate in Delhi yesterday ordered the release of CJP (Cockroach Janta Party) members Abhijeet Dipke, Ashutosh Ranka and Saurav Das after they furnished surety bonds of Rs 50,000 each, undertaking 'to maintain peace and good behavior' for one year." TOI. The magistrate has seen pictures completely opposite to what we have seen. "In scenes rarely witnessed aboard a commercial flight, the CJP's Dipke, Das and Ranka were detained from inside an aircraft shortly after landing in Delhi." "A Delhi Police team, notably comprising mostly women cops, entered the Air India flight from Mumbai within minutes of touchdown and detained the trio as co-passengers looked on and shot videos." India Today. Apparently, their crime was that they intended to protest peacefully against election fraud. On 17 May, "MEA (Ministry of External Affairs) Secretary (West) Sibi George strongly defended India's democratic system, diversity and minority rights during Prime Minister Narendra Modi's visit to the Netherlands." ddnews.gov.in. Since Mr Modi did not deny this bold assertion, we can assume this is official. "In India, fundamental rights are considered an essential part of the basic structure of the constitution, which in any case cannot be violated." And, "The right to a peaceful assembly without arms is a fundamental right under Article 19(1)(b) of the Constitution." iPleaders. On cue, "Acting on directions from the Delhi High Court, Delhi Police issued notices to leaders of the CJP,"  involving "allegations of a woman's photographs being doctored into objectionable images, which were circulated online." ET. That might explain the posse of female police officers to arrest the three leaders from the airplane. If any one of the men sneezed or coughed loudly a uniform could burst open and an extremely serious case of 'Outrage of Female Modesty' under Section 354 (LawyersclubIndia) could result. On 10 October, "Delhi Police has deployed more than 35,000 police and paramilitary personnel, set up six designated detention centers and prepared surveillance measures involving body cameras, facial recognition systems, CCTV cameras and drones." The internet was shut down around central Delhi and 45 Metro stations were closed. ET. All incoming mail and express trains arriving in New Delhi and Nizamuddin Stations between 4 am and 2 pm were cancelled. HT. The center of Delhi around Connaught Place and Jantar Mantar was completely sealed off and "By 9 pm, over 67,000 protesters had been detained across Delhi." HT. Traders estimated a loss of up to Rs 20 billion due to the closure of markets in and around Connaught Place. ET. What right has the government to convert our capital city into an internment camp disrupting the life of tax paying citizens of Delhi? "The UN human rights office has expressed concern over mass detentions during large scale protests, urging Indian authorities uphold the right to peaceful assembly and immediately release anyone arbitrarily detained." TNIE. To that, "In a statement, External Affairs Ministry spokesperson Randhir Jaiswal described the OHCHR's remarks as unwarranted and an unacceptable interference in country's internal affairs. Mr Jaiswal said that violent responses to protests in India's neighborhood,...had gone unremarked." newsonair.gov.in. Mass arrests, shutting down our right to travel and converting the whole city into an open air prison is not "internal affairs". We call it an infernal affront. Did he just admit that India has become a Pakistan? "The spokesperson highlighted that India is the world's largest democracy, where the right to peaceful assembly is guaranteed by the Constitution and safeguarded by robust institutions, an independent judiciary and a free media." Journalists and media personnel were arrested, and even assaulted, despite showing their IDs and cameras. TOI. There goes the "free media". "Judges of Supreme Court and high courts are, in effect, being appointed directly by Prime Minister Narendra Modi rather than the collegium, said former judge of Madras High Court K Chandru." TOI. So much for robust institutions. We do not object to lying to the world. What we object to is the lies are so barefaced and so obviously silly that it makes a laughing stock of India and Indians. Get someone to invent clever lies. Don't make us look stupid.       

Irrational markets making money.

Four days back, "The Monetary Policy Committee (MPC) unanimously voted to raise the policy repo rate by 25 basis points (bps) to 5.50%, after a detailed assessment of evolving macroeconomic and financial conditions, developments and outlook." Expected Real GDP growth rate was increased from 6.7% to 7.1% for FY 2026-27, while consumer price index (CPI) inflation is expected to be 5.2% and core inflation to be 4.4%. ET. The day before the MPC meeting, "The rupee declined 0.15% to 96.43 per dollar" and the RBI is thought to have supported it. "The currency hit a record low of 96.96 in May." ET. From June to September the RBI raised $136.4 billion from overseas borrowing (DC), which ballooned the forward liability by $200 billion. "Will it be a case of too little too late?" as there has not been much change since its last meeting on 26 August. "Even at the newly-hiked rate of 5.50%, the real policy repo rate is negative, if one accepts the MPC projected rate of inflation during the third quarter (6%) and the fourth quarter (5.7%)," wrote Mythili Bhusnurmath. The Indian rupee has fallen to 96.70 to one dollar since then. xe.com. On 2 October, SBI Research called for immediate "protective guardrails" around the rupee and said, "the balance of risks has 'tilted decisively' towards a 25 bps rate hike." "The report said the global environment argues against waiting, pointing to rate increases by South Korea and Philippines in August and by the US, Japan, the euro area and New Zealand in September amid renewed inflation risks." BT. On 10 October, "SBI Research has called for stronger Reserve Bank of India (RBI) intervention to manage currency volatility," because of "a changing global financial environment, with a resurgent US dollar, uncertainty over the Federal Reserve's interest rate trajectory and rising international bond yields." BT. "In the week ended 4 September 2026, the country's forex reserves touched a record $785.71 billion,' but "by 2 October, reserves had declined to $734.6 billion, according to RBI data. The sharp fall suggests continued intervention by the RBI in the foreign exchange market." When the FCNR (B) scheme was announced in June, the rupee was trading at 95.74 to the dollar but despite huge inflows under the scheme the rupee touched 96.84 against the dollar on 7 October before closing at 96.77. One reason is that "In total, foreign portfolio investors (FPIs) have sold a massive Rs 2.85 trillion in Indian equity so far in 2026." BT. By selling dollars to support the rupee, the RBI is increasing FPI repatriation as they convert their proceeds. Effectively, India has borrowed dollars at up to 6.5% rate of interest (IDBI Bank) as a gift to FPIs to take more dollars home. "India's central banks governor Sanjay Malhotra said financial markets could be irrational in the short term and several measures suggested the rupee was undervalued." Reuters. In June 2025, the RBI cut its policy rate by a large 50 basis points, for a cumulative reduction of 100 bps in the four months since February  South Indian Bank. With inflation rising and the rupee under pressure, why didn't the RBI raise rates by at least 50 bps, instead of a cosmetic 25 bps, to show it is serious? "It's only in the long run they are able to find the right value (of the rupee)," said Malhotra. Indeed! "In the long run we are all dead," said the famous economist, John Maynard Keynes. Goodreads. Till then markets are making money. Because the RBI is giving them. No need to wait.    

The Silver Anniversary.

Mr Narendra Modi has been continuously in power for 25 years first as chief minister of Gujarat and then as the prime minister of India. "His followers are celebrating. His Cabinet has passed a resolution praising him." Suddenly, a perfect storm seems to be building. The Election Commission and the judiciary are not trusted, inflation is rising, even the 'Godi (lapdog) Media'  (wikipedia) is interviewing Opposition leader Mr Rahul Gandhi, inflation is climbing, the rupee is dropping, the US is humiliating India almost daily, foreign investors (FIIs) selling a cumulative Rs 358.61 billion of Indian equities (NDTV) and, worst of all, young people are laughing at Mr Modi. The Print. Billionaire Elon Musk alleged that, "Starlink was being blocked 'by certain oligarchs in order to maintain their monopolistic chokehold on the India people'."  "India defended its satellite internet approval process as fair and non-discriminatory." Reuters. Within hours Musk wrote on X, "Starlink is licensed in over 165 countries and has spent five years complying with every single law and requirement of the government of India, so why still no license? Is Ambani the real boss of India?" (NDTV. That is an indirect reference to Mr Modi. While Ambani is safe in India, other Indian companies with business in the US are not. The US suspended eight major technology companies, including Microsoft, Infosys, Wipro and Tata Consultancy Services (TCS) from Permanent Labor Certification (PERM) which is a pathway to getting a green card and permanent residency. ET. Vice President JD Vance said that companies were replacing American workers with "foreign indentured servants". Though Vance did not mention India in particular, New Delhi found the remark "deeply offensive and unwarranted". TOI. At home, "India's influential Gen Z-led 'cockroach' protesters are back on the streets - this time seeking electoral reforms and the resignation of Chief Election Commissioner (CEC) Gyanesh Kumar over allegations of manipulating voter rolls." BBC. Shiv Sena UBT Rajya Sabha MP Sanjay Raut said, "Before Gyanesh Kumar, Rajiv Kumar was the Chief Election Commissioner." "Rajiv Kumar and Gyanesh Kumar are criminals of the country." He also alleged that "the Election Commission and the system had been 'hijacked' since Prime Minister Narendra Modi and Union Home Minister Amit Shah came to power." ABP. The Cockroach Janata Party (CJP) called for a protest at Delhi's Jantar Mantar today but, "CJP has claimed that Abhijeet Dipke, Saurav Das and Ashutosh Ranka were detained upon landing at the Delhi Airport ahead of their planned protest at Jantar Mantar against CEC Gyanesh Kumar." HT. Delhi has been converted into a concentration camp (wikipedia) as "Delhi Police has deployed more than 35,000 police and paramilitary personnel, set up six designated detention centers and prepared surveillance measures involving body cameras, facial recognition systems, CCTV cameras and drones. If it sounds like the war in Ukraine where Russia and Ukraine are using semi-autonomous drones (The Conversation), then the difference is that this is not against a foreign military but against unarmed Indian civilians. Connaught Place, the center of Delhi, has been shut down which, traders say, will cause Rs 20 billion in losses. ET. CJP founder Abhijeet Dipke claimed that Mr Modi is "scared of the youth" and is "waging a war against his own people". ET. Mr Modi cannot allow Gyanesh Kumar to resign or be replaced because that would be tantamount to admitting that elections are fraudulent, perhaps including his own. Already foreign envoys such as the US Ambassador, the Australian High Commissioner, the Russian Ambassador and the Malaysian Prime Minister Anwar Ibrahim have met Mr Rahul Gandhi. DC. Mr Modi and Mr Amit Shah must be terrified of being forced out and having to face reprisals for their misdeeds. Also the BJP cadre, whose lucrative posts and impunity for crimes, depend on these two will not allow them to lose power. There are 165 foreign embassies and high commissions in Delhi (wikipedia). How long will they hold Delhi hostage and beat up unarmed protesters? Is that why Mr Modi, who loves photo ops in foreign lands, missed the UN General Assembly meeting in New York for the second successive year in 2026? Bol News. Hoist by his own petard (wikipedia). As it were.    

France in debt.

"Since the Cockroach Janta Party (CJP) launched its second campaign, School Thik Karo (repair our schools), on Independence Day, it has encountered resistance of strikingly different kinds across Bharatiya Janata Party (BJP)-ruled states. In West Bengal, a CJP volunteer's school inspection was followed by a violent attack on his family in which his father died;" in Rajasthan the CJP was confronted by a rowdy crowd to prevent them from entering schools and in Maharashtra CJP founder Abhijeet Dipke was booked. The Wire. The government has responded with savage violence to their peaceful protests, including permanently blinding some by indiscriminate firing of pellet guns (BBC) possibly because CJP volunteers are mostly adults who they think will not vote for them anyway. Gen Alpha are schoolchildren (The Print) and the BJP is chary of enraging their parents. Even as school protests have cooled somewhat in India, "Police fired teargas at protesters outside French high schools two days back, as teachers and students took to the streets on the biggest day of what Prime Minister Sebastien Lecornu described as the most violent school protests in decades." Reuters. "France has suspended the use of stun grenades for policing student protests that have swept the country, after a 15-year-old's hand was blown off earlier this week." A 14-year-old boy lost some teeth and had his jaw broken when allegedly hit in the face with a tear gas grenade and "Prosecutors also said an investigation for attempted murder had been opened after a 17-year-old protester complained an officer 'held his head underwater' while trying to arrest him near a river." BBC. Stun grenades were invented to incapacitate terrorists without causing physical harm but can cause injuries or kill in close proximity and also cause fires. wikipedia. Treating schoolchildren as terrorists is a new low for President Emmanuel Macron. "More than 6,000 arrests and dozens of injuries have been reported in the clashes, as per Reuters." "French 15-year-olds scored 43 points lower in reading in 2025 than in 2015, according to the OECD's Programme for International Student Assessment, the biggest drop among OECD countries. Their mathematics score also dropped the most." HT. In November 2020, "Against the backdrop of student's protest - even in the midst of a COVID lockdown - and increasing police violence and repression, France passed the draconian Global Security Law which would make it an offense punishable by a year in jail and a 45,000 euro fine to film, post, and identify police officers committing violent actions." People's World. In May 2021, "France's top constitutional authority said it had rejected a key article of a new security law that could see prosecutions of people who publish photos or film footage of police officer." The Local. Why are schools in such a poor state in France? Because of Macron. "France is on the edge of a dangerous financial spiral," as it "now pays more to borrow than former crisis hot spots like Greece and Italy." France's debt is now 120% of GDP and the cost of servicing the debt is expected to climb 59% by 2030. Macron released 10 billion euros to mollify the Yellow Vests protests (wikipedia) that began on 17 November 2018 and ended on 28 June 2020. During the Covid pandemic, "Macron responded with massive spending programs to shield companies and households from the fallout."  "Macron also poured tens of billions of euros into a program that capped energy prices after Russia invaded Ukraine." The fiscal deficit has been above 5% for the last three years. WSJ. "Public debt levels have climbed across the world over the past two decades, especially in developed countries." "In the April 2026 edition of its Fiscal Monitor, the International Monetary Fund said, "Policymakers should realize that markets are becoming less forgiving. Over the past few years, investors have increasingly questioned assumptions of unlimited sovereign borrowing capacity - even for large advanced economies," wrote Niranjan Rajadhyaksha. Will the French economy crash? Being part of the euro zone France will be rescued but all the countries will see their borrowing costs rise. Other countries may be blaming Macron in colorful language which may explain his savagery towards schoolchildren. Pellet guns and stun grenades on students. Crime? Asking for a good education. What can be more innocent? 

Drowning in money.

The Finance Ministry's Monthly Economic Review for September 2026 "said the domestic economy continues to show resilience in a challenging global environment." "A strong El Nino could hurt the rabi crop through heat stress and lower soil moisture," and "Elevated crude prices could add to inflation particularly after the US Federal Reserve's 25 basis points rate hikes in September." ET. "Overall food inflation rose to 5.95% in August from 5.52% in July, while headline consumer inflation climbed to 4.82% from 4.45%." "Costlier onions, higher cooking oil prices, a jump in the cost of pulses, and the same shopping list can start becoming noticeably more expensive over time." ET. "The monsoon has failed. Rainfall was 12.6% below normal. In earlier decades, this would have spelt economic calamity and political earthquake." "In 1965, an 18.6% rainfall deficit caused a 3.7% GDP contraction." But in 2009, the GDP grew 8.5% despite a 21.8% rainfall deficit. The monsoon failed in 2014 and 2015 but the "economy soared 7.2% and 8.0% respectively," wrote Swaminathan Aiyar. However, "Despite claims that India's economy has become drought-proof, weak rains remain a key worry." "Inadequate rainfall reduces summer crop yields and leaves inadequate soil moisture for winter sowing." Higher fertilizer prices and lower harvests raise food prices and "Rural purchasing power weakens precisely when households must spend more on essentials. This combination transmits distress beyond agriculture to consumer goods, construction and small businesses. Imports can relieve supply shortages but worsen external finances," wrote Ajit Ranade. The US Federal Reserve raised interest rate by 25 basis points (bps) last month and could hike it once more this year. "The European Central Bank and Bank of Japan have raised rates too." Higher US rate "triggers capital outflows from other markets into the US." This weakens local currencies and leads to imported inflation." Mint. The Reserve Bank of India opened a dollar/rupee swap window for Foreign Currency Non-Resident (FCNR) (B) deposits for banks from June to 31 August. The RBI undertook to sell the dollars back at the buying rate during redemption of the bonds, thus picking up the full cost of hedging any depreciation of the rupee against the dollar. India Macroeconomic Indices. At the end of the window FCNR (B) deposits raised $127.23 billion, while "Overseas Foreign-Currency Borrowings (OFCB) brought in $5.260 billion, and External Commercial Borrowings (ECB) contributed $3.891 billion," for a total of $136.4 billion. DC. As the RBI swapped the dollars for rupees, "Surplus liquidity in India's money market has crossed Rs 11 trillion, leaving RBI to mop up an unusually large pool of cash unleashed by banks' $136 billion mobilisation of foreign currency deposit." CFO. The yield on 10-year government bonds is at 7.247% this morning. in.investing.com. "The 10-year India government bond (IGB) has hardened by around 50 basis points (bps) since the beginning of March, to about 7.20%." And, "it is interesting to see that the rupee is back under depreciation pressure," which "has also confused market participants about why $140 billion will not alleviate pressure." It is because, "The $200 billion forward book is being kept afloat through sell-buy swaps to roll over the dollar liability and maintain 'optimum' reserve levels." This means actual reserves are closer to $550 billion. "The question that begs the central bank is whether a 50 bps rate hike is enough? Will a 100 bps cash reserve ratio be adequate in permanently absorbing the troubling sticky and inflationary excess liquidity created by the FCNR scheme's much celebrated dollar inflows? asked Ajay Marwaha. Cash reserve ratio (CRR) is a portion of deposits collected by banks that must be deposited at the RBI without any interest. Investopedia. This is to reduce money supply. Poor monsoon rains, but it's raining money on the market. Will the RBI drown? And take us with it?