Not fooling anyone.

"India's central bank is intervening in all foreign-exchange markets and will continue to do so to protect the rupee that slid to a record low Monday, said a person familiar with the matter," ET. "The rupee dropped as much as 0.8% to an unprecedented 77.53 a dollar on Monday, as foreigners continue to pull money from Indian stocks." "The Reserve Bank of India (RBI) sees its foreign currency reserves of about $600 billion as a formidable stockpile that it will put to use against speculators." The RBI seems to be confused. First, those $600 billion belong to the nation and not to the RBI. Second, the so-called "speculators" are legitimate foreign funds (FPI) which are selling Indian stocks so that, "Foreign funds' ownership in domestic equities fell to pre-COVID lows and hit a multi-year low of 19.5 percent in March this year in NSE companies valued at USD 619 billion, shows an analysis," ET. The vaunted reserves dropped to $597.728 billion in the week ended 29 April, having fallen a massive $34 billion or 5.4% since 24 February, NDTV. Which means our reserves are lower than FPI's holdings in our stocks. Terrifying. "In fact, the RBI has spent over $25 billion from its reserves to defend the rupee. But for its intervention, the exchange rate may have been near Rs 80 to a dollar," wrote MK Venu. The RBI lowered its policy rate to 4% in May 2020, RBI press release, and has been stubbornly ignoring inflation. Even in the last meeting, the Monetary Policy Committee (MPC) on 8 April held interest rate at 4%, maintained accommodative stance and predicted an absurd inflation rate of 5.7% for this financial year, BT. Then, suddenly in panic, it raised the repo rate by an odd 40 basis points to 4.40% on 4 May, when the global situation remained much the same, ET. The RBI also increased the Cash Reserve Ratio (CRR) by 50 basis points to remove Rs 870 billion of liquidity from banks, ET. RBI's entire effort has been geared towards keeping borrowing costs low for the government, by keeping interest rate below the inflation rate, thereby transferring wealth from savers to borrowers.Since the government is the largest borrower, with the budget predicting borrowing at over Rs 16.61 trillion, ET, the RBI has been transferring our wealth to the government. Yields of benchmark 10-year government bonds have risen to 7.465%, worldgovernmentbonds. com, which means the markets do not believe the RBI. To get some precious foreign exchange the government decided to sell shares worth $2.7 billion in our largest insurance company, the Life Insurance Corporation of India (LIC), but FPIs have bought a mere 2% of shares set aside for institutional investors, ET. The government is asking the RBI to bring down bond yields by buying government bonds from the market, thereby increasing prices, Reuters. If the RBI is working only for the government, the government should take over the RBI. It's not fooling anyone.