The bears are here.

The Reserve Bank of India (RBI) is to pay a 'dividend' of Rs 2865.8846 billion (around Rs 2.87 trillion) to the Central government for the accounting year 2025-26. "This year's dividend payment by the central bank is 6.7% higher than the previous year's Rs 2.69 trillion," and that was 27% higher than the year before. This constitutes 90.8%of budgeted non-tax revenue of the Centre but is less than the rs 3.16 trillion demanded by the Budget. DH. The RBI's balance sheet rose 20.61% to Rs 91.97 trillion as on 31 March 2026. "India's foreign exchange reserves fell by $8.09 billion to $688.89 billion in the week ended 15 May, according to data released by the RBI." Foreign currency assets fell $6.48 billion to $545.90 billion. ET. Was the RBI selling foreign currency to defend the rupee even though "Allowing the rupee to weaken" "raises the cost of imported goods and overseas travel in rupee terms, encouraging households and firms to economise on precisely those expenditures that strain the balance of payments," advised Prof Gita Gopinath. And, Chairman of the 16th Finance Commission, Arvind Panagariya posted on X, "Do not let the psychology of Rs 100 per dollar determine your policy response. 100 is just  number, like 99 and 101." News18. Clearly he does not watch cricket, where 100 is celebrated as a century and 200 or 300 are counted as centuries in a batter's record. wikipedia. Retailers have long known that items priced at 99.99 are seen as cheaper than one priced at 100 by customers. News18. Sources told Reuters that "Within the central bank, there is a clear consensus that utilizing interest rate hikes to defend the currency would be counterproductive." And that, "the central bank prioritizes inflation control and economic growth over currency defense." ET. A fall in the value of the rupee will increase the value of imports and cause inflation. In addition, petrol and diesel prices were raised for the third time in less than 10 days - first by Rs 3, then by Rs 0.90 and now by Rs 0.87, for a total of nearly Rs 5 per liter. Mint. The government probably thinks that increasing prices furtively by small increments will not be noticed by people, but this will immediately add to transport costs and increase prices across all goods and services. Already, commercial vehicle drivers' unions in Delhi-NCR have called for a three-day strike in support of an increase in fares. TOI. "India's central bank may need to draw on its 2013 taper tantrum playbook and earlier balance-of-payments crises to mount an effective defense of the beleaguered rupee." This might involve selling dollar bonds abroad to increase foreign exchange reserves. "But any deposit plan or bond issuance will come at a steep cost as interest rates have risen sharply globally. Banks offered deposit rates of 3.5% to 5% in 2013, but would likely need to pay at least 8% to 9% to attract funds, said Madhavi Arora, economist at Emkay Global Financial Services Ltd." ET. We are told that the macro situation is much better than it was in 2013, when India, Indonesia, South Africa, Brazil and Turkey were labeled as the 'Fragile Five' because of their large current account deficits. BBC. Why the panic now, when, in December, RBI Governor Sanjay Malhotra bragged about a "rare Goldilocks period" for the Indian economy? DD News. The fear may be, "If RBI is seen to be intervening heavily and is yet unable to arrest the rupee's fall, markets may conclude that the central bank is losing the battle." If that happens, "Exporters delay repatriating export proceeds, Importers rush to prepay for shipments. Households buy gold and dollars," wrote former RBI Governor Duvvuri Subbarao. "The RBI sold a net $53.13 billion in the spot foreign exchange market in FY26" (BS), "has a short dollar book close to $100 billion in offshore and onshore markets" (Subhadip Sircar), has bloated its balance sheet to Rs 91.97 trillion and has handed over a cash bonanza of Rs 2.87 trillion to the government. So what are the RBI's options if it refuses to increase interest rates? Borrow abroad at 8-9%, which will deplete reserves, or print rupees by the sackful, which will tank the rupee. The bears have come for Goldilocks. Run.