PLAYING WITH FIRE | The rupee was losing its value at nearly the rate of acceleration due to gravity until recently. It reached the point of hitting a century, and Mahamanav would have lost face completely. This was happening because foreign investors were not investing; they were taking money out, and Indians were also taking their money out, while imports increased and exports reduced. Now, RBI was pushed to create an FCNR(B) scheme that allows banks to receive US dollar deposits at domestic FD rates of 6.5–7% for a term of 3–5 years. Earlier, banks used to take the exchange-rate risk and give 3–3.5% interest on US dollar deposits. The FCNR(B) scheme is basically RBI taking the risk instead of banks. Therefore, banks can give higher interest rates, as RBI guarantees to return the same USD amounts it took from them after three or five years. RBI raised around $127.226B using this scheme, which is ₹12.09 lakh crore at an exchange rate of ₹95. If the economic situation does not improve and the rupee depreciates further over the next few years, the country will have to pay a huge price to save Mahamanav’s face. If the dollar hits ₹100, RBI will lose just ₹64,000 crore. If the rupee drops to ₹110, the loss will be ₹191,000 crore. If the rupee drops to ₹120, the loss will be ₹318,000 crore. And if the rupee reaches ₹130, the loss will be ₹445,000 crore. Now, Bhakts will argue that the UPA government did the same in 2013. Here’s the difference. In 2013, the rupee started depreciating because of a global phenomenon called the taper tantrum. After the 2008 financial crisis, the US ran an easy-money policy by pumping cash into the economy. In 2013, it stopped the easy-money policy, which increased US bond yields (interest rates) by 1%. This drove foreign investors back to the US, and they sold off some of their holdings in developing countries, including India. So, the dollar dropped to ₹64 in 2013, and in September 2013, RBI introduced an FCNR scheme for the first time and raised $24 billion. RBI could take this risk because it felt that the rupee was undervalued at ₹64 and would return to higher values after the taper tantrum ended. And it was right. The rupee climbed back to ₹56 later. In fact, when RBI had to pay the banks back in 2016–17, the exchange rate was back at ₹62–64, and it did not make any loss. Is that the case now? Our exchange rate is collapsing because of internal weakness. Our exports are dwindling, while imports are climbing steadily. On top of that, our Stupid Ji committed to buying $500 billion worth of American goods over the next five years. Meanwhile, our exports to the US are reducing, and so are our exports to China. And oil prices are going to stay high as well. Do you see where this is going? The rupee is supposed to have hit ₹100+ by now, going by its real value. And RBI is trying to catch a falling knife just to protect the face of Mahamanav. Nothing else. We’ve written this down to warn you, to make you aware, and to record it. In the future, when the country has to pay the price for the Modi era, this will be one of the biggest penalties our future generations will have to pay for the past mistake of electing a clown to power. If you are still not convinced, read about Mahamanav’s Sovereign Gold Bond Scheme.