Rupee drowning in deluge of words.

India's "merchandise exports fell by nearly 1% to $38.01 billion in December 2024 while imports rose by 4.8% to $59.95 billion." Trade deficit fell to $21.94 billion from $32.84 billion in November. "Gold import bill for November 2024, which was reported at $14.8 billion, has been lowered to $9.8 billion. This is the sharpest ever correction in gold import data." DH. $4 billion would have bought just short of 52 tonnes of gold. calculateme. That is an enormous amount of gold. So was it an honest mistake, or...? The Reserve Bank of India (RBI) bought 8 tonnes of gold in November and a total of 73 tonnes in 2024, raising its gold holdings to 876 tonnes. ET. With a mark down of 52 tonnes of gold, it is no surprise that the rupee is feeling the chill. "The rupee weakened to its all-time low on 14 Jan, hitting a record low of 86.6475 before closing at 86.63 against the US dollar, down from its close at 86.5750 in the previous session." "The main reason behind a weakening rupee is strengthening of the US dollar amid improved macroeconomic scenario in the US." ET. "The government, in the forthcoming Budget, could consider levying higher tariffs on imports to check the significant decline in rupee value witnessed in the past three months, said EY Chief Policy Adviser DK Srivastava." As "higher import duties would curb the demand for dollars by importers," presumably by reduction of demand due to higher prices. ET. How much would higher import prices add to inflation? For instance, India "has registered a growth of 4.12% in overall imports of bulk drugs and intermediaries at Rs 377.22 billion during the fiscal year 2023-24, as compared to Rs 362.29 billion in the previous fiscal year." pharmabiz.com. People must buy medicines regardless of cost and imported components are used in manufacturing of many things. The average annual consumer price (CPI) inflation in India from 2014-2024 has been around 5% (RI) compared to an average annual inflation rate of around 2.5% in the US over the same period (US Inflation Calculator). Because inflation compounds over time, an article costing 1000 units of currency in 2014 would cost 1,710.34 in India but just 1,312.09 in the US in 2024 (investor.gov). Thus, the purchasing power of the rupee falls against the dollar over time. The rupee must depreciate to reflect that. Bond prices fell and yields rose in global bond markets in anticipation of higher inflation. "The US Treasury yields have shot up to 4.8% this January," and "India's 10-year bond yield has climbed to 6.9%," as foreign institutional investors (FIIs) sought higher returns in the safety of the dollar. India Today. When the RBI is unable to sell government bonds because dealers reject yields as too low they devolve on the underwriters. RBI auctions devolved eight times in 2022-23 but not even once in 2023-24 because of their inclusion in the Morgan Stanley Government Bond Index. FE. This year foreign fund flows will be lower. BS. Foreign investors are not interested in buying sovereign green bonds from Gujarat's Gift City because they are denominated in rupees. They want the bonds in dollars. Mint. The rupee has collapsed from 62 to the dollar in 2014, when Mr Modi first came to power (Bankbazar) to around 86.48 to one dollar this morning (xe.com). Mr Modi promised to strengthen the rupee mocked social media (Indiatimes.com). But then, when you spout jumla nonstop it comes back to bite you. Deluge of words to drown our brains. No respite.