Not just a piece of paper.

"The rupee declined 10.8% in FY26 since the closing levels of last fiscal year - recording the worst performance since FY12. Much of this decline came during the pre-war period, even when the dollar was weakening, and other currencies were gaining," wrote Payal Bhattacharya. "India's close to $700bn in foreign exchange reserves will not run out because of higher imports. The only way reserves get depleted is if RBI decides to sell foreign exchange reserves to support the rupee." A weaker rupee is good. "A depreciation raises the cost of imported goods and overseas travel in rupee terms, encouraging households and firms to to economise on precisely those expenditures that strain the balance of payments. In doing so, it delivers - more effectively and more durably - the shift towards domestic spending that voluntary restraint seeks to achieve," Prof Gita Gopinath. India is losing foreign exchange as foreign institutional investors (FIIs) are selling Indian stocks. "FIIs have been net sellers in 13 out of the past 20 months." In 2025, FIIs sold Rs 1.66 trillion in equities and bought Rs 947 billion of debt. But, "Since the US-Israel war with Iran began at the end of February, FIIs have sold Rs 2.03 trillion in equities and also pulled out Rs 125.12 billion from debt." Domestic institutional investors (DIIs) have been buying as FIIs have sold out. DIIs now hold 19.24% of the NSE-listed companies while FIIs hold 16.13%. In December 2020, FIIs held 21.16% while DIIs held 13.58%, wrote Sreedev Kanyakumar. Buying by domestic investors prevents any significant fall in share prices, limiting losses of foreign investors and repatriation of more foreign exchange. Since Sanjay Malhotra took over a Governor of the Reserve Bank of India (RBI) in December 2024, the RBI has slashed its interest rate by 125 basis points (bps) and also pumped nearly Rs 20 trillion into banks to bring down borrowing costs. "Yet, the funds simply leaked out of India's banking system as global money managers dumped local assets and took dollars home," wrote Andy Mukherjee. The RBI has been buying up government debt and "the amount of government paper (including treasury bills) held as on 28 February was Rs 21.34 trillion. It was Rs 15.58 trillion in March 2025." "Starting from automatic monetization, under which 4.6% of treasury bills were once issued by the government to RBI for funding the deficit," "In the 90s, we shifted to the market becoming the sole point of contact for the government." "However, with frequent OMOs (open market operations) in recent times, there has been a tendency for that debt to be transferred to RBI and held by it," wrote Madan Sabnavis. There has also been an "extraordinary rise in RBI's surplus transfers to the Union government. In 2023-24, it transferred Rs 2.11 trillion, which was 7.6% of the Centre's overall revenue receipts. The transfer for 2025-26 may be even larger than last year's record Rs 2.69 trillion." The International Monetary Fund (IMF) has warned of "quasi-fiscal" support by the RBI, wrote Ajit Ranade. The rupee has fallen not just against the US dollar but by nearly 12% against the Pakistani rupee and by 10% against the Bangladesh Taka. ET. The steep depreciation in the rupee is unfair because India has a low current account deficit, low external debt and is bringing down its fiscal deficit. India has also received a credit rating upgrade from three institutions. It is because of the flood of investment into artificial intelligence (AI) companies drawing funds away from emerging market economies, regardless of fundamentals, wrote Chief Economic Advisor V Ananatha Nageswaran. Theoretically, a central bank cannot go broke because it can print currency (ET), but printing currency makes it weaker, and if the currency keeps losing value, the wealth of the people and the country will become worthless. India may not be bankrupt but its citizens will feel like that. The rupee is not just a piece of paper. It is food, medicines, rent, education and travel for us. Say no to fiscal support. It's suicide.