Appreciate the rupee.

"Commerce Minister Piyush Goyal said yesterday it is time for the Indian rupee to appreciate on the back of inflows in debt and equity markets." ET. India's foreign exchange reserves "were at $704.89 billion in the week through Sept 27 in their biggest weekly increase since mid-July 2023, Reserve Bank of India (RBI) data showed. India is only the fourth economy in the world to cross $700 billion in reserves after China, Japan and Switzerland." "The increase was spurred by $7.8 billion in dollar purchases by the RBI and $4.8 billion in valuation gains." Reuters. This gives us the ability to finance our imports for 11.9 months but Brazil has 17.8 months and Russia has 25.7 months of cover. A stronger rupee will bring down the cost of imports and inflation and that could spur the RBI to reduce policy rate. India's consumer price index (CPI) inflation dropped to 3.65% in August from 6.83% in August 2023. MoSPI. In its August meeting, the Monetary Policy Committee (MPC) of the RBI decided to hold its policy rate at 6.5% for the ninth time in a row, in a 4:2 majority decision. ET. A lower interest rate will hopefully encourage companies to increase their investments on lower borrowing costs and so create more jobs. "Royalty payments by Indian subsidiaries of multinationals to their overseas parents increased nearly 42% in the past five years," as "An ET study of 10 companies - including Hindustan Unilever  (HUL), Nestle, Maruti Suzuki, Bosch, Colgate-Palmolive, Bata, Whirlpool and 3M India - showed that their cumulative payout to their parents crossed the Rs 80 billion mark in 2023-24, up from Rs 56 billion in 2018-19." "A 'Buy China, Sell India' trade is getting played out in emerging markets as FIIs have sold Indian stocks worth around Rs 307.18 billion in the first 3 days of October." ET. Presumably, the rupees are being converted to Chinese yuan. "Chinese bazooka to revive its markets and economy is winning the hearts of foreign investors," and "Announcing that it is taking a fiscal leap of faith on China as it is now or never for policymakers to deliver, CLSA said it is raising China to 5% overweight by cutting India overweight to 10% from 20%." "On Indian equities, it said there are three witches - oil price, new issuance (IPO boom) and retail investor appetite." ET. "In cash, DIIs (domestic institutional investors) purchased a provisional Rs 132.4512 billion against FII (foreign institutional investors) sales of a provisional Rs 82.9341 billion yesterday, according to BSE data." Mint. Thus, domestic investors are providing higher profits to foreign investors. All very good. But, a stronger rupee may hit our exports by making our goods and services more expensive. As it is, exports of merchandise fell from $451.07 billion in 2022-23 to $437.06 billion in 2023-24, but services exports rose from $325.33 billion to $339.62 billion over the same period. pib.gov.in. A more muscular rupee could lower exports which will mean fewer jobs in India. When over 3000 Indian students queue up for waiter jobs in Canada (TOI), we should not be so complacent. We have accumulated over $704 billion of forex. Does that show we appreciate the rupee?