An excess of money.

"A weaker rupee, often seen as a sign of economic stress, may be emerging as an unexpected advantage for India's exporters, according to the government's economic review. But the Finance Ministry has cautioned that the benefit will materialise only if global demand remains resilient and inflation stays under control." ET. The latest annual report from the Reserve Bank of India (RBI) says that, "On the one hand, the central bank sees strong domestic demand, healthy banks and continued economic resilience. On the other, it flags concerns over slowing growth, rising global uncertainty, inflation risks and geopolitical tensions that could affect India in the months ahead." India Today. "On May 29, foreign portfolio investors (FPIs) net sold Rs 206.37 billion worth of Indian equities, their largest single one-day withdrawal in years, according to NSE provisional data." "Domestic institutional investors cushioned some of the blows, buying Rs 162.60-Rs 167.64 billion, but could not prevent the sharp fall." MSN. "Foreign investors continued to pare their exposure to Indian equities, withdrawing Rs 329.63 billion in May due to weak earnings growth, rupee depreciation and more attractive opportunities in other markets. With this total outflow by FPIs  from the equity market has reached Rs 2.25 trillion in 2026, which is higher than the Rs 1.66 trillion pulled out during the entire 2025." ET. If rupee depreciation is one of the factors for the selling, FPIs repatriating in foreign exchange weakens the rupee even further. Among its many functions, one of the most important function of the RBI is maintaining the value of the rupee. The RBI does that by varying the interest rate, buying or selling foreign exchange, mainly dollars, buying gold and open market operations. Kunvarji Wealth Solutions. Most importantly, RBI has the power to print money. "The RBI prints and manages currency in India." While, "The Indian government regulates the denominations of currency in circulation." Investopedia. "Last week the RBI transferred a record dividend of Rs 2.87 trillion to the Centre for 2025-26." "In 2025-26, the RBI's income was a record Rs 4.28 trillion, up 26% the previous year. Of this, it spent about a third, or Rs 1.41 trillion." TIE. To infuse liquidity into the system, the RBI bought Rs 9 trillion worth of government bonds from banks. Strangely, it shows interest from government bonds at Rs 1.08 trillion as income but does not show the purchasing price of Rs 9 trillion as expenditure. "The RBI's balance sheet swelled to Rs 91.97 trillion at the end of March 2026, up 20.6% year-on-year, due to a rise in domestic investments as well as gold and foreign investments, according to the central bank's annual report." newsonair.gov.in. Since the RBI has no manufacturing or services business, cannot create foreign exchange and does not own a gold mine, it must be buying its assets with Indian Rupees. In India, "On one side is its gleaming showcase, UPI (Unified Payments Interface)  (wikipedia), with 21.7 billion transactions in January 2026 worth Rs 28.33 trillion in value. On the other side is the system of physical cash. Currency in circulation (CIC) hit Rs 40 trillion, rising 11% year-on-year," wrote Ajit Ranade. "The apparent paradox of the usage of both rising is a warning that we are settling into a hybrid equilibrium: digital for convenience, cash for avoidance or for those excluded from UPI's digital infrastructure." UPI is linked to bank accounts, which means a phenomenal increase in money supply "which includes all cash and liquid assets in a nation's economy on a certain date." Investopedia. When there is an excess of money its value will fall and inflation will follow. Is the RBI responsible? Can someone explain. Unless they are too terrified.