The middle finger of fate.

"The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) on 05 August unanimously decided to keep the policy rate unchanged at 5.25%, while retaining its neutral stance." "Explaining the decision, the MPC said the economy continues to remain resilient despite heightened global uncertainty, while inflation is expected to rise in the coming months before easing." Real GDP growth rate is projected at 6.7% in 2026-27 and at 7.3% in the first quarter of FY 28 and CPI inflation is expected at 5%. ET. On 29 April, "India's economy remains resilient but faces mounting risks from the Middle East conflict, which has disrupted supplies of energy, fertilizers and industrial raw materials, raised costs and weakened trade, the government's monthly report said." The International Monetary Fund (IMF) raised its growth forecast for India from 6.4% to 6.5% but "risks were tilted towards higher inflation." Reuters. Politicians always want lower interest rates because that lowers the government's borrowing cost. In May 2018, "Turkey's President Tayyip Erdogan called for lower interest rates and described them as the 'mother and father of all evil', triggering a fresh slide in the lira," which fell from 4.2374 to 4.3080 against the dollar." Reuters. The Turkish lira is trading at 47.7026 against one dollar today, less than one-tenth ot in value of 2018. in. investing.com. If the value of the currency falls, costs go up, and as costs rise the value falls further. Turkey's inflation rose from 16.33% in 2018, when Erdogan made his brilliant statement, went up to 72.31% in 2022 (macrotrends) and is at 31.75% today (tcmb.gov.tr). Erdogan was seen handing out cash to voters at a polling station during elections in 2023. (independent.co). India has not reached Turkey's level as yet but the RBI was forced to raise its policy rate by 40 basis points (bps) in an emergency meeting on 5 May 2022, after holding it at 4% since May 2020, "barely hours before the US Federal Reserve was set to raise rates by 50 (bps)" (TOI), even though the consumer price index (CPI) inflation was raging at around an average of 6.5% (rateinflation.com). No wonder the rupee has dropped from around 76.38 in 2020 to one US dollar (bookmyforex.com) to 95.26 to 1 USD today (xe.com). Also, Prime Minister Narendra Modi transferred Rs 10,000 to the bank accounts of 7.5 million women in September 2025 at a cost of Rs 75 billion (pib.gov.in) just over one month before Assembly elections on 6 and 11 November (wikipedia). Since this unexpected handout would be expected to add to the fiscal deficit the government needs the interest rate to stay as low as possible and the RBI has to raise tens of billions of dollars from non-resident Indians (NRI) at much higher rates (ET) to prevent the rupee from tanking. US President Donald Trump "for months publicly pressured the Federal Reserve to slash its benchmark rates, claiming it would be 'Rocket Fuel!' for growth and make housing affordable." ABC. But Trump appointee "Federal Reserve Chairman Kevin Warsh said on 29 July that the US central bank has no higher 'soft target' for inflation and is determined to meet its longstanding 2% goal despite leaving rates unchanged amid elevated inflation readings." Reuters. Politicians just want to win elections but the central bank is supposed to make calculated decisions balancing growth, inflation and the currency. JP Morgan is pricing in a 25 bps rise in US interest rate in the Fed's September meeting. Will the RBI hold a panic meeting as it did in 2022? "RBI's rate policy panel has failed to read what's written on the wall, wrote Mythili Bhusnurmath. "The moving finger writes; and having writ moves on," wrote Omar Khayyam in the 12th century. Goodreads. Khaiyyam was writing about the finger of fate. RBI should beware. It's not the middle finger.