Indian Rupee 20260611

India Insider: Should the RBI Raise Interest Rates?

by with No Comment AssetsBehavioral SentimentBen EzraCentral BanksExclusive ContentFeatured HighlightsForexIndiaRisk ManagementUncategorizedWorld

A Case for Higher Interest Rates In India

As the Rupee remains under pressure and oil prices continue to rise amid tensions in the Middle East, the debate has shifted towards what the Reserve Bank of India (RBI) should do next.

Economist Janak Raj has argued that raising interest rates to defend the Rupee comes with significant costs. Higher rates increase the cost of capital for businesses, reduce investment activity, and compress equity valuations. In theory, this could even accelerate foreign outflows from equities rather than attract fresh capital. Yet the RBI may soon find itself with limited options.

Indian Rupee 20260611

USD/INR One Year Chart as of 11th of June 2026

Foreign Portfolio Investors (FPIs) were net buyers of Indian equities for most of the period between 2004 and 2024, with only a few exceptions such as 2011, 2018 and 2022. However, the trend has changed. FPIs sold approximately $19 billion USD worth of Indian equities in 2025 and another $24 billion USD so far in 2026.

Question: Why are Foreign Investors Selling

One reason is that global investors today have alternatives. The growth of Artificial Intelligence related companies in the United States has created significant investment opportunities. At the same time, U.S Treasury yields hovering around 4.6% offer attractive risk-free returns in a strengthening dollar environment.

For many global investors, earning high returns in Dollar assets is preferable to taking exposure in emerging markets that face current account pressures from rising  Crude Oil prices and other energy costs.

Taxation is another factor. India taxes foreign investors at 20% on short-term capital gains and 12.5% on long-term gains. Meanwhile, competing financial centres such as Singapore, Hong Kong, Malaysia and Thailand generally do not tax foreign investors’ capital gains.

Some global funds have argued that India should move closer to international norms, where capital gains are usually taxed in the investor’s home jurisdiction rather than the country where the investment is made. Higher post-tax returns would undoubtedly make Indian assets more attractive.

A stable Rupee would also reduce hedging costs, lower currency-risk premiums and improve the overall risk-reward profile for overseas investors. However, tax cuts alone cannot solve India’s problem.

The Real Issue is Balance of Payments

As Business Line columnist Lokeshwari Mam has pointed out, a significant portion of equity outflows consists of short-term speculative capital. Long-term capital tends to remain invested. This is why the decline in net Foreign Direct Investment (FDI) should concern policymakers more than short-term fluctuations in portfolio flows.

Net FDI has fallen sharply from $28 billion in FY 2022-23 to just $7.7 billion in the year ended March 2026. This is a worrying trend because FDI is the most stable source of external financing. Unlike portfolio flows, it creates factories, jobs, exports and long-term productive capacity.

India therefore needs more than tax incentives. A genuine single window clearance system, reduced bureaucracy, easier business regulations and reforms in manufacturing remain essential. Attracting long-term capital should be a national priority.

The recent foreign buying of Indian bonds after tax cuts is encouraging. But relative to India’s current account financing requirements, it remains a small drop in the ocean.

For example, in FY 2025, the current account deficit was 0.6% of GDP. And in Q4, the current account became a surplus. Is it really that difficult to finance it’s small current account deficit?

India’s external vulnerability is determined not merely by a current account deficit, but by whether the capital account can be comfortably financed. A modest current account deficit still creates currency pressure if foreign capital inflows weaken (which we are seeing), while a larger deficit may be sustainable when capital inflows remain strong. The risk of sustained higher oil prices could widen the deficit, increasing India’s dependence on foreign capital at a time when global liquidity is tightening and U.S Treasury yields are rising.

Furthermore, hedging costs continue to erode much of the yield advantage that Indian bonds offer over U.S Treasuries. In that sense, active global money is likely to prefer Dollar assets over emerging-market debt or equities

India’s repo rate currently stands at 5.25%. The RBI’s decision to raise its inflation forecast to 5.1%, while lowering its GDP growth projection to 6.6% reveals where the shock from the Iran conflict is likely to be felt via higher inflation and weaker growth. For an economy that remains heavily dependent on imported oil, a depreciating Rupee only compounds the problem by increasing the cost of energy imports. 

In such an environment, the Monetary Policy Committee is unlikely to focus solely on growth. Currency stability, inflation expectations and the availability of foreign capital to finance India’s external requirements could become increasingly important considerations. If these pressures persist, the RBI should raise the repo rate, in the same manner other Asian central banks have done in recent weeks.

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Celtics and the Middle East 20260609

Falling into the Middle Eastern Trap

by with No Comment Behavioral SentimentCommoditiesExclusive ContentFeatured HighlightsIra SlomowitzRisk ManagementUncategorizedWorld

When Talking Becomes an Obsession

Opinion: The following article is commentary and its views are solely those of the author. This article was first published the 9th of June via The Angry Demagogue.

The United States is falling into the Middle Eastern trap that Israel fell into thirty years ago. This trap fits nicely with the post cold-war progressive Western way of diplomacy in that its goal is “talking”. Perpetual talking rather than deal making is the key to understanding the Middle Eastern way of things and Israel has become a practitioner in the “way” that led directly to October 7. The idea of perpetual talking is to reach a situation where you can defeat your opponent without making concessions. In the Middle East, they suck you in to a point where just “talking” becomes an obsession. The United States is heading into the same where results are less important than the act of discussion itself.

Celtics and the Middle East 20260609

Falling into the Middle Eastern Trap – When Talking Becomes an Obsession 9th of June 2026

This obsession, this being sucked into something against your best interests reminds me of a wonderful episode of Cheers, the sitcom that takes place in a Boston bar – a bar in which pints of beer plus inane discussions over anything that leads to nowhere is its reason for being. The episode that I am thinking of has Boston Celtics great Kevin McHale as a guest and the two main instigators of irrelevant and purposeless conversation, Norm and Cliff, (not so) innocently ask McHale how may bolts are in the famous parquet floor at the Boston Garden.

The waitress Carla, Boston working class par excellence, begs the basketball star to ignore them, knowing he will become obsessed and sucked into something that clearly will lead to a disaster for him and her beloved Celtics. Sure enough, the episode ends with McHale driving towards the basket with what ought to be the winning shot only to get distracted by trying to figure out how many bolts are in the floor of the Boston Garden.

That is exactly what is happening now in in the Middle East where President Trump is the basketball star being distracted by Iran and their attempt to suck him into endless discussions that are meant to lead to nothing productive. We don’t know if McHale ever figured out the number of bolts, but besides going back to Cheers with the answer, it is a useless endeavor that can only lead to defeat. So too, with the Trump Administration and the sacred talks with Iran where the end game might be something he can bring back to a press conference in DC or a rally in Pennsylvania but will be worth as much as knowing the number of bolts in the Boston Garden floor.

Israel fell into this trap with the Palestinian Authority of Yasser Arafat and when talks ended, the only goal was to start them up again. Just return to talking. The result didn’t matter. This trap picked up again after October 7 when the goal seemed to be to always be talking with Hamas via Qatar or Egypt even if everyone knew it would lead to nowhere. Ironically, it was President Trump who realized this and was able to do his dealmaking magic to free the hostages – but only after the IDF put Hamas in an untenable situation and Qatar wanted a “great deal” with the Trump administration. Talks never led anywhere.

So here we are, the Trump Administration is hell bent on continuing discussions for the sake of discussions no matter how many times Kuwait, UAE, Bahrain, Israel, or even the U.S military get shot at by Iran. When the goal is talking – when the obsession becomes talking – you have fallen into the Middle Eastern trap much as Keven McHale fell into the trap of inane bar talk for the sake of inane bar talk.

While the American President is a deal maker par-excellence, the Middle Eastern leaders, this time Iran’s, are the experts at making you think that talking is always the best outcome – because it is, for them. Eventually, their experience tells them, you will make a mistake. The Administration has allowed Iran to attack allies at will in the Gulf and in Israel, as Iran gains concession after concession due to the trap that is “talks at all costs”. The first concession was linking Lebanon to the talks and the next, done just yesterday was in putting Iran and Israel on the same level.

This is the mistake one would expect from the Obama-Biden crowd where they always believed that talks were the purpose – they didn’t have to fall into any trap as they were there already. However, the Trump Administration understood the fallacy of forever talks which is what makes it so painful to see them fall into the same Middle-Eastern and Western, progressive trap. Obsession to make a deal is good because results oriented; but an obsession that is just to “get back to talking” will lead only to results that you never wanted in the first place.

Disclaimer: the views expressed in this opinion article are solely those of the author, and not necessarily the opinions reflected by angrymetatraders.com or its associated parties.

Follow Ira Slomowitz via The Angry Demagogue on Substack https://iraslomowitz.substack.com/

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Nasdaq 100 20260608

Nasdaq 100: Terrible Friday Being Confronted by Manic Monday

by with No Comment AMT MarketsAssetsBehavioral SentimentBusinessEquitiesFeatured HighlightsFederal Reserve, Interest RatesFinancial InstitutionsForexMajor Global Equity IndicesRisk ManagementSpeculatorsUncategorizedWorld

Fear of the Middle East Not the Main Motivator for the Nasdaq 100

After Friday’s selling surge and a fall of -4.77% with a close of 28,957.60, the Nasdaq 100 futures trading this morning has actually seen an increase and is near the 29,479.00 mark as of this writing before the cash Nasdaq 100 market opens.

Friday’s selling nightmare for traders who found themselves stubbornly locked into what were to be short-term buying positions and saw the Nasdaq 100 plummet -4.77%, probably woke this morning believing ugly conditions may not stop. An escalation in military action via proclaimed retaliatory moves between Israel and Iran started today’s trading with a high degree of more anxiousness. USD centric strength in Forex was demonstrated early.

Nasdaq 100 20260608

Nasdaq 100 Futures Value 1 Month Chart as of the 8th of June 2026

However, in the past couple of hours calmer heads have prevailed among financial institutions and USD centric buying in the broad Forex market has run out of steam – at least momentarily. For instance the USD/JPY is near 159.927 currently, opposed to earlier highs seen this morning which challenged the 160.400 vicinity. What does this have to do with the Nasdaq 100 and its current status? 

It appears via futures trading that large players may also have taken a sedative and looked at the index as having been oversold on Friday. The Nasdaq 100 has actually gained early today and signs that a de-escalation of military force between Israel and Iran is being reported. However, that still leaves day traders wondering what will happen as the cash market opens soon and volumes increase.

Let’s Say Quiet Prevails the Remainder of the Day

Not because of a utopian outlook, but a geopolitical perspective, let’s try to image Iran’s stated intentions of no more retaliatory strikes being launched towards Israel as true. The past couple of hours have been more tranquil as a signal in case you are wondering. Then investors and financial institutions will have to digest the Middle East concerns as they have done over the past couple of months in U.S equities, and decide to operate again on the Nasdaq 100 with near and mid-term outlooks.

Friday’s huge selling was blamed by some on the likelihood of a ‘potential’ U.S Federal Reserve interest rate taking place on the 17th of June. This because better than expected jobs numbers showed to some that the U.S economy was running hot once again. 

Additionally expressed fears, which are legitimate, about higher energy costs sparking sticky inflation have been discussed and worried about aloud. Yet, again let’s decide to say even if U.S inflation numbers via the Consumer Price Index come in higher than expected this Wednesday via the coming CPI data, that doesn’t shut the door on the possibility the new Fed Chair Kevin Warsh won’t fight against an interest rate hike during the FOMC meeting next week. In other words it still seems rather unlikely – to me – that the new Federal Reserve Chairman is going to want to initiate higher interest rates the first month on the job. So what if there was another reason for the steep selling on the Nasdaq 100?

Not Paradise but Purgatory

The Nasdaq 100 actually has other questions which have been raised as possible fodder for its large selling this past Friday. Was it spawned because of profit taking by those who took advantage of the index’s fabulous rise knowing that many institutions had been front running the IPO of SpaceX which is scheduled to happen on the 12th of June – this Friday? 

Did large players who rode the wave of frontrunning by financial institutions up in the Nasdaq 100 since late March, decide to cash in profits. There is plenty of nervousness surrounding what will take place with SpaceX in the coming months and long-term via outlooks because of its rather inflated valuation which looks like it will be around 1.7+ Trillion plus at share values of $135.00 per share this coming Friday. 

Questions surrounding SpaceX’s price per sales rhetoric, this instead of price per earnings (because SpaceX is not making a net profit) is just one example. While denying Elon Musk’s genius and ability to create clamor for his companies has proven to be a losing proposition for many, doubters still remain. 

Folks might have cashed out winnings on Friday and decided to now wait on the sidelines to see where behavioral sentiment takes the Nasdaq 100. After two full months of paradise for the Nasdaq 100, a few days of purgatory and seeing which direction U.S indices go may be the right decision by folks who rely on clarity; this as the Middle East gets untangled (or becomes more complicated), the Federal Reserve offers insights on the 17th of June, and large financial institutions lead the way regarding investment decisions.

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Female Work Percents 20260605

India Insider: Growth Matters, Development Matters Even More

by with No Comment AssetsBehavioral SentimentBen EzraCommoditiesExclusive ContentFeatured HighlightsIndiaInvestingUncategorizedWorld

Participation of Women in the Workforce and Advancing Progress

There is more poverty in this world than many of us realize and would like to comprehend when confronted by the facts, and this is also true with India.

Recently, I visited several villages in Tiruvannamalai District in Tamil Nadu State on behalf of Angry Meta Traders to survey household capital formation, wage growth and labor market dynamics. To my astonishment, in many homes, people still use rice and palm oil purchased through ration shops. The important observation is their consumption basket appears narrow and heavily dependent on subsidized essentials. I saw simple aluminum utensils in kitchens, when higher income households often use silver-plated utensils. Things that many middle-class families consider normal like energy drinks, snacks, or packaged foods were often absent.

What struck me even more was the number of women managing families alone. In some households, the husbands had died due to excessive alcohol consumption. Children attended government schools and depended on nutritious meal schemes provided by the State.

Growing up, I have seen people wear torn uniforms in school because their family could not afford new uniform every year. Some did not wear shoes, and many students stood outside the class because the fees in private schools in India are several times higher than what government schools would charge and their families could not pay on time. Yet, through education and perseverance, many people have succeeded. 

However, the poverty I witnessed in Tiruvannamalai District is different. These observations reminded me of a study published in the Lancet Regional Health Center. Researchers followed 251 children in Vellore District (closer to Tiruvannamalai District) and found that poor children living in urban areas were often exposed to calorie-rich but nutrient poor food environments.

If such conditions exist in parts of Tamil Nadu State, one of India’s more developed states, then we should think carefully about the situation across the country.

Another Transformation is Taking Place

For generations, many women carried the burden of childcare, household work, elder care and agricultural labor simultaneously. In many families, they sacrificed their own aspirations for others. Are women born to carry everyone’s burden?

Interestingly, across the globe especially in Southeast Asia, education and economic opportunities have expanded women’s choices. Researchers such as Stanford University’s visiting Professor Alice Evans argue that many women choose marriage only when their partner’s own goals align with their own. If not, remaining single becomes a reasonable choice for them

Female Work Percents 20260605

Female Labor Participation Rates Comparing India and China from 2011 to 2024

As shown in the above chart, India has certainly made progress, but female participation in the workforce remains below that of many East Asian economies. A society that fully allows women to participate in economic life is likely to become more prosperous and productive.

Economic realities are also shaping family decisions. Housing is expensive. Job markets are uncertain. Inflation remains a challenge. Asset prices have risen significantly.

Yesterday, a college friend called me. He recently built a new house in his town. He is 33 years old, unmarried, and works in Oman. Years of overseas employment and remittances have helped him to achieve his goals. I sometimes wonder whether the same outcome would have been possible had he stayed and earned entirely in India, especially outside the software and technology sectors.

India still has demographic advantages, but a demographic does not bear fruit automatically. It requires healthy, educated and economically secure citizens.

We often speak about India becoming a developed nation. However, the real question is whether growth can and will improve the lives of ordinary people, especially women, children and underprivileged. Growth matters, development matters even more.

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Perception Over Fact 20260603

Perception Over Fact: Iran as the Savior of Beirut

by with No Comment Behavioral SentimentCommoditiesExclusive ContentFeatured HighlightsIndiaIra SlomowitzRisk ManagementUncategorizedWorld

Trump Policy and The Art of a Middle Eastern Deal: Israel, Iran and Lebanon

Opinion: The following article is commentary and its views are solely those of the author. This article was first published the 2nd of June via The Angry Demagogue.

Although it is difficult to see where the negotiations between Iran and the United States are going – if anywhere – over the last 24 hours the United States has made Iran the “savior” of Beirut. Against American policy of creating a civil and unified Lebanon at peace with its neighbors, the Trump Administration has told the Lebanese government and people that Iran still controls what happens in Lebanon.

Perception Over Fact 20260603

Perception over Fact: Iran as the Savior of Beirut

Even if this was not the case, in the art of the Middle Eastern deal, perception is more important than fact. Whether the Trump Administration actually twisted Israel’s arm due to Iran’s demands or not, the fact that Israel has agreed not to bomb the Dahiya section of Beirut after announcing that they would gives a message to the Lebanese people and government that Iran still calls the shots in Lebanon and not to rush to support those who wish to disarm or dismantle Hezbollah since you will be on the losing side.

Lebanon has been embroiled in civil wars since its inception. Beirut, the “Paris of the Middle East” has never known quiet times although that did not stop the partying (sort of like Paris itself today) and Iran’s involvement, much like Syria’s and the PLO’s before has not helped. Before the PLO inspired civil war in the mid 1970’s, after King Hussein threw them out of Jordan, the civil wars were about Lebanon itself. The French thought they created a formula for the creation of a semi-western state by dividing up the power centers amongst the religious and ethnic groups – Maronite-Christians got the Presidency, the Sunnis the Prime Minister-ship, the Shiites the speaker of the Parliament. The Druze historically were appointed Chief of the General Staff of the army.

This formula was, as can be imagined, not one for the free exchange of ideas but caused a rush to create power centers and led to conflict, civil and military. But it was all internal. Once the PLO and Yassir Arafat came, Israel became a factor in the civil war since Israel had to cross the border to stop the PLO from its numerous cross border terrorist attacks. After the First Lebanon War and the forced exit of the PLO, Iran created Hezbollah with the sole aim of using it, in the future, to destroy Israel. Therefore, from the late 1970’s until today, the Lebanese state has been embroiled, often against its will, in the Israeli-Palestinian conflict.

The goal of the Trump Administration’s negotiations in Washington between Israel and the Lebanese government is to break Iran’s stranglehold over Lebanese internal and external policy and allow it to either establish diplomatic relations with Israel or at least to put the two countries in the situation they were in before the late 1970’s – and that was a quiet, irrelevant border for both countries.

The real or even perceived notion that Beirut was “saved” from Israeli bombing by Iran’s demands has set back that goal and given Hezbollah and hence Iran, veto power over Lebanese government policy. The correct answer to Iran after their demands were made tying Lebanon to the cease fire was that Lebanon is none of your business and if your proxy decided to join your war then they will have to take responsibility for it. The time for “protecting” Lebanon was when you ordered Hezbollah to come to your aid and attack Israel’s north. The result of that – the administration needs to tell both Iran and the Lebanese government and people, is the loss of Lebanese sovereign territory to Israel and the destruction of Shiite villages in the south of the country. A further price is the destruction of the Beirut neighborhood in which Hezbollah has command and control facilities as well as underground arms depots.

Iran cannot be seen to be the savior of Beirut and Lebanon but the cause of its troubles. No amount of rhetoric to the contrary will prove to the Lebanese government and people what they see on the ground now – only Iran has the power to stop Israel’s bombing of their country. The Administration has set back its goals in Lebanon without aiding its war effort in Iran. The constant Iranian threat to make the war regional is coming true since the Administration is not taking seriously Iranian deal-making methods.

As we wrote two months ago in The Art of the (Middle Eastern) Deal” – “Each ‘concession’ by Iran will have to be paid for twice or three times – once upon agreement and then again before numerous times before implementation”. Iran agreed to open the Straits and then reneged and the US is negotiation for that again – AFTER Iran received the much needed cease fire.

Now, after the administration denied linkage to Lebanon, Iran is again demanding that linkage – not in order to open the Straits, but just to continue negotiations. This pushes both American interests to the back burner – the opening of the Straits of Hormuz and the normalization of Lebanon as a country free from Iranian influence. And the “concession” that Iran is giving for this is just a continuation of the negotiations that have been going on for over two months. In other words, like most negotiations in the middle east that are supposed to lead to “peace” – this too is moving backwards.

President Trump has asked for patience and has insisted that the United States will never accept a bad deal – and I am willing to be patient and believe that. But what if the goal of the Iranian government is not a deal at all but the ability to re-set their genocidal triad or missiles, proxies and nuclear weapons? These negotiations have given them time to dig out their underground missile cities, to keep their enriched uranium hidden and now to revive their flailing major proxy – Hezbollah. In the end, as the President said, it will be good, but by allowing Iran to take the initiative he is making it harder to get to that “good”.

What we have now is a continuation of American-Iranian negotiations where a concession was given to Iran and they are no closer to reaching an agreement. Iran is now perceived as the power to be reckoned with in Lebanon and Israel is put on a level with Hezbollah. Iran and the United States are now equals in this negotiation, something that was not the case when they started. While it might in fact end well, the journey is now a longer and more difficult one. The perception given by the last 24 hours that Iran controls Lebanon, is now the “fact” that the Middle East “knows”.

Disclaimer: the views expressed in this opinion article are solely those of the author, and not necessarily the opinions reflected by angrymetatraders.com or its associated parties.

Follow Ira Slomowitz via The Angry Demagogue on Substack https://iraslomowitz.substack.com/

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Fear of Russia 20260529

Fear of Russia in Europe

by with No Comment Behavioral SentimentExclusive ContentFeatured HighlightsIra SlomowitzRisk ManagementUncategorizedWorld

Time for the Baltic+ Alliance

Opinion: The following article is commentary and its views are solely those of the author. This article was first published the 28th of May via The Angry Demagogue.

The Wall Street Journal had a thoughtful piece the other day (Europe is Starting to Think Putin will Expand the War Beyond Ukraine) on Europe fearing that Russia will look to expand their war beyond Ukraine. This has been a fear since Russia’s ill-fated invasion four years ago and is the reason why Europe is supporting Ukraine (not due to any love or respect for the people of Ukraine).

The gist of the article though is America’s possible unwillingness to come to the rescue of Europe and honor their NATO commitments. These fears are not unfounded, but sitting and worrying about American will or overextension will not deter Putin from yet another attempt to divert attention to the deteriorating nature of his country’s military, economy and general health.

Fear of Russia 20260529

Rather than whine and wonder, those front line countries that will be most affected by Russian adventures need to form a new or sub-alignment and make moves that Russia can judge only as threatening to any new venture. Rather than not provoke, this new alliance needs to show Russia that they have the power and more importantly the will to defend the Baltic States and others that border Russia and are most at risk.

As we have written in the past (National Security Strategy, part 2: Regional Alliances-Europe), only countries with “skin in the game” have the will and the opportunity to successfully fight any Russian invasion. This Baltic+ alliance of Poland, Germany, Sweden, Finland, Norway, Denmark, Latvia, Lithuania and Estonia have a joint population of nearly 160 million people to Russia’s 145 million. Further, these countries have nearly 500 advanced jet fighters and a navy that can control the Baltic Sea. They have around 1,500 battle tanks combined and over 300,000 infantry soldiers.

Neither the United States, nor for that matter the UK, France, Italy or Spain (not to speak of the weak Benelux countries) have the will to defend the Baltic countries but, as they usually do, will offer diplomatic and other “help” in case of crisis. These 9 Baltic+ countries alone have the wherewithal and power to defeat Russia in case of attack. Joint air and naval maneuvers in and near the Baltic countries, naval buildups in the Baltic and the movement of tanks and infantry closer to the border including a “tripwire” in the Baltic countries themselves should be enough to deter and if necessary, defeat Russia in a new Putin venture.

However, this needs to be made operational and not just discussed. They cannot show the cowardice they usually show when facing military challenges like they have done in the Persian Gulf. Diplomatic solutions can work when backed up by superior military force and a clear will to use that force.

While the U.S sending 9,000 troops to Poland is a good thing, Sweden’s increasing its naval and air presence close to the Baltic States, combined with Polish and German tanks and infantry in those states and Finland moving troops close to its border with Russia will be taken by Russia with a sense of seriousness. There should be no fear of “provoking” Russia since Russia responds to perceived weakness and not strength. Russia would love to depend on America’s “overextension” and lack of will but this strong new alliance will compensate for any American hesitation. More than that, it will be taken more seriously than a few American brigades on Polish soil.

The creation of alliances does not need years of study and position papers, but bold moves by leaders that are sworn to protect their countries. If Europe seriously fears a Russian expansion of their war beyond Ukraine, then leadership of a kind Europe has been missing since Adenauer, De Gaulle and Thatcher left the scene, needs to come to the fore. Only then will it make sense for America to use its formidable power.

America does have a deep national interest in containing Russia and protecting Central Europe but, like when it faced its Iranian enemy it needs allies that are willing and able to take a central role in combat and not only half hearted support at the UN.

Disclaimer: the views expressed in this opinion article are solely those of the author, and not necessarily the opinions reflected by angrymetatraders.com or its associated parties.

You can follow Ira Slomowitz via The Angry Demagogue on Substack https://iraslomowitz.substack.com/ 

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post277

India Insider: Growth without Prosperity, Thoughts and Comparisons

by with No Comment Ben EzraBusinessCentral BanksCommoditiesCorporateDataExclusive ContentFeatured HighlightsIndiaInvestingUncategorizedWorld

Growth and Prosperity Data Meet India and China's Realities

Economic growth is important for generating prosperity. India as well as China has helped millions be lifted out of poverty using separate development trajectories. Still, questions about income distribution remain a difficult topic that policy makers in both nations often are unwilling to look at with deeper persistence because plenty of inequalities still exists and the subject remains potentially divisive.

China’s low income population is extremely large. Professor Li Shi’s research argues that nearly 300 million people in China are earning less than 1000 Yuan ($149 USD) per month in 2021, while nearly 98 million had monthly incomes below 500 Yuan ($75 USD).

The same is true for the majority in India. As per the Pahle Foundation research shows nearly 91% of India’s workforce remains in the informal sector where their annual per capita incomes are below ₹2.5 lakh Rupees or ₹20,800 Rupees per month ($217 USD per month).

post277

Although industrial and wage models are different comparatively, for instance in China the industrial sector includes 32% of the total working age population and produces an estimate of 36 to 37% of the GDP. And 22% of China’s workforce are employed in agriculture and produce close to 7% of GDP. In India a higher share of the people are in agriculture – close to 45%, and generate roughly 15-18% of the nation’s GDP.

However, there are still problems in both countries regarding inequality via wage disparities of citizens. When income growth is stagnated or not growing, fixed assets capital formation is difficult. People save less and invest less, which in turn makes the economic consumption story difficult. This is happening in China and in India.

Regarding growth, Professor Li listed a series of mounting pressures: China’s growth rate has fallen from its high-speed era of 8 to 10% to around 5%. Household income growth has slowed sharply and the weakest gains are among the poorest groups. Urban wage growth has also softened. Consumption remains structurally weak. Fixed-asset investment, especially private investment has lost momentum. Unemployment, particularly among young people remains elevated. These are not separate problems. Taken together they raise a harder question, whether China can still generate the level of growth needed to meet its 2035 and 2050 prosperity targets?

India between 2015–2016 experienced significant growth driven by consumption, investment and services expansion. After Covid-19 its growth has stabilized around 6 to 7%, yet higher levels of prosperity are not clearly visible for many and inequality has widened.

The unemployment rate among those aged 16 to 24 in China has remained around 16% for an extended period, fluctuating during seasonal reasons. Unemployment among other age groups have also risen gradually, indicating clear pressure in the labor markets.

In India the unemployment for youth aged between 16 to 25 of age is 42%, per a Azim Premji University Surveys and State of Working India report in 2023. This unemployment rate is double the ratio of what we are witnessing in China.

While in China the education departments have shifted towards STEM (Science, Technology, Engineering and Medicine). India still focuses on Social Science curriculums and students who study within these fields often cannot find job opportunities in the labor market.

India for many years hasn’t invested a substantial amount of energy and commitment to build a vibrant manufacturing sector. Yet, studies have shown that every job created by manufacturing exports creates two additional jobs in related sectors like transportation and logistics. 

China’s wealth inequality via income has risen sharply, Professor Li Shi estimates the wealth Gini coefficient above 0.7 in 2023. India’s wealth inequality may be even more concentrated. Various estimates place India’s wealth inequality/income distribution per the Gini coefficient above 0.80, indicating an extremely unequal distribution of assets and accumulated capital. 

However, the structures of inequality differ between the two economies. In China inequality emerged alongside rapid industrialization, urbanization and export, and led to manufacturing growth. A large industrial economy generated substantial wealth – but distributed it unevenly between labor and capital. 

In India inequality is shaped not only by a wealth concentration at the top, but also by the persistence of low productivity via employment, informal labor markets, weak wage growth, and limited human capital investment across large sections of the population. Thus, while China faces the challenge of emphasizing prosperity within a middle income industrial economy, India continues to struggle with the deeper structural problem of trying to create broad based household income growth in the first place. The differential also sheds light on industrial sector based employment and those in agricultural jobs comparatively between the two nations regarding wage context.

Hard questions that China should ask include if their employment force – who are without many social protections and suffer a lack of higher wages, will allow China to attain competitive advantage over the rest of the world? While its manufacturing products are in demand, it doesn’t help the average Chinese person see realized wages go up and nor creates a dignified life. And China’s trading partners do not benefit, because a lack of competitive advantage destroys industries and makes unemployment problems even worse in other nations. It’s not a question about advantage only, it’s also about why this surplus and deficit competitive problem is growing rapidly and makes stable prosperity unachievable over the long term.

In India despite being proclaimed as the fastest growing global economy, if the young population don’t get jobs and cannot create income for their families, then what’s the purpose of this high GDP growth? Yes, the nation gets to show good growth numbers while hoping to achieve additional investment, but problematic results still occur.

Economic growth without wage growth leads to widening inequality, social unrest and sometimes political backlash. For growth to be inclusive, wages need to rise along with GDP. This requires not just distribution, but a transformation like raising the average productivity of every worker and ensuring they receive their fair share of the economic pie.

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US Dollar Index 20260627

The USD and The Art of Not Knowing

by with No Comment AssetsBehavioral SentimentCentral BanksEquitiesFeatured HighlightsFederal Reserve, Interest RatesFinancial InstitutionsForexInvestingRisk ManagementSpeculatorsUncategorizedWorld

Being Mature Enough to Know You Don't Know as You Watch the Marketplace

Ask anyone that typically knows how they gauge the state of the global marketplace for the near-term and you are likely to either get a solid, “I have no idea” now. Or a bunch of thoughts on what might happen, which might lead to being more confused. Simply put at this point, it is easier to admit that potential conclusions regarding the world’s current affairs taking place and effecting the global marketplace are out of most peoples’ hands. 

Even those who have duties within the higher paid grades likely are just as confused about the potential unintended consequences not wanted, and results they hope will be achieved. And what am I speaking about exactly, regarding the world and its state of affairs, is that even qualifying the particular topics are difficult to put a finger on. Ramblings certainly include the Iran saga, but Cuba, the Ukraine, the NATO pact, shifting world alliances and future ones are creating a whirlwind. Besides the rather noisy political landscape of the USA. Not to mention China and Russia and other nations with aspirations.

Yet, the global markets continue to trade, albeit within a confused haze it sometimes appears. But do not be despondent day traders, brokers and their platforms will offer you the opportunity to wager on results of the USD in Forex, and CFDs certainly contain opportunities in major equity indices the world over, various big singular companies, commodities and yes cryptocurrencies (apologies to Bitcoin fans – who insist it is called a digital currency).

US Dollar Index 20260627

U.S Dollar Index Six Month Chart as of 27th May 2026

Iran War and Unclear Results

The U.S Dollar Index for the moment is near the 98.880 ratio, which it should be pointed out is near the values it swam upon the April 8th announcement of a ceasefire between Iran and the States, this after dropping from its 99.800 threshold on the 7th when investors were more troubled. The ceasefire is still in effect and now there seems to be a resolution which is being hoped for by the U.S White House – although when pressed about what negotiations between Iran and the U.S will result in delivers a few different versions of ideas. 

Perhaps that is to be expected via the fog of war, but what should not be expected is an easy path to a genuine resolution. And even if there is a pact of some type, what objectives will have been genuinely fulfilled? But alas, that is a question for those in the future, because the facts on the ground do not bode well for ordinary Iranians who have yearned for freedom. 

The Fed Has a Problem

But again, let’s not dwell on things like the individual rights of people, money is at stake…..(that is humor folks, others can call it sarcasm). The price of WTI Crude Oil has dropped this week on the idea that a resolution will actually be accomplished between Iran and the U.S – one at least that allows tankers to navigate the Hormuz Strait. 

The price of WTI via futures at this moment are around the $90.00 mark again, this after moving within sight of 88.00 USD earlier today. At the end of last week the $96.00 mark was in sight for WTI. And the price of energy continues to cast a shadow that is moving over the U.S Federal Reserve and has large implications for the new Fed Chairman Kevin Warsh. 

The mid-term versus the long-term in financial institutions as they judge their interest rate perspectives are likely making for rather entertaining dialogue. And let’s not forget ladies and gentlemen, the U.S mid-term elections are approaching in November of this year and are resulting in primary elections that are punishing Republicans who voiced criticism towards President Trump. The question about who will hold power in the U.S House of Representatives is a big riddle. Even the U.S Senate leadership may be fragile. Why is that important, because if President Trump were to become what is known as a lame-duck President during his last two years in office, this would produce different outlooks among investors. Stay focused on the money people. 

Our Forex Friend: The BoJ

The USD/JPY is now traversing its 159.490 vicinity again, and perhaps that is a bell weather for soothsayers to criticize again. The Bank of Japan is watching the Japanese Yen as its trades within sight of its weakest values, and yes, the BoJ can be expected to issue another warning to speculators once again about being run over by an intervention. The BoJ’s broken record about interventions have produced solid results for folks who are able to trade the USD/JPY with positions that can be held for a few weeks at a time – namely hedge funds, large players and some financial institutions. Retail traders trying to take advantage of the USD/JPY are likely suffering trauma via anxiety if their wagers have gone in the wrong direction.

SpaceX and Scams in the Cryptoworld

And as a bonus, let’s not forget about rumblings regarding SpaceX and another topic within the I do not know category. Elon Musk has set the table for an attempt at a 2 trillion USD market cap after the IPO for the corporation is launched in the second week of June. The value of SpaceX can be and will be argued for the next few years as admirers and critics lineup to be heard and spread sheets are compared regarding revenues against one of the greatest marketing giants of our time. Intriguingly, however, are hints that there has been a lot of cryptocurrency fiddling regarding how the corporation is going to allow investors to participate. Apparently there have been tokens issued in the cryptocurrency world that have promised some type of participation in SpaceX and most are being exposed as scams and have nothing to do with the company or Musk. Buyer beware folks.

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India Tamil Nadu State 20260521

India Insider: Capital Formation in Rural Areas and Distress Hill Terrain

by with No Comment AssetsCommoditiesFeatured HighlightsIndiaUncategorizedWorld

Income Comparison via Two Distinct Districts: Tiruvannamlai and Madurai

India is a vastly developing economy, but its national accounting frequently relies on formal sector performance to extrapolate the conditions of the informal economy. Despite official statistics continuing to rise, the economic reality of rural India remains largely unchanged.

Recently, I was travelling extensively across villages in the Tiruvannamalai district of Tamil Nadu State in South India, trying to understand how capital formation works in rural and semi-rural areas.

India Tamil Nadu State 20260521

For more than 50 kilometers, there were barely any shops related to consumption activity. There is no absolute poverty in these areas, but income levels are clearly not standard enough to support strong consumption patterns.

Many people in Tiruvannamalai district villages work in neighboring cities liken Tiruppur, Bengaluru or Chennai and send cash back to their families. Apart from these remittances, agriculture and related seasonal income add to household earnings.

The second observation based on my extensive survey with about 55 women, was that I hardly saw anyone wearing gold chains or ornaments in villages. In other words, household income is often not sufficient enough for families to consistently accumulate gold or jewelry, which traditionally act as a form of savings in Tamil Nadu households.

Evidence suggests the reason for weak savings and low capital formation in Tiruvannamalai is due to low household income generation. And the reason for low household income can be attributed to a lack of local opportunities which offer weak wage growth, plus dependence on migration and the seasonal nature of agriculture sector. Education also plays a decisive role, but the broader issue demonstrates inadequacy of stable income generation.

We do not have sufficient recent district level data to fully validate many of these observations. Tamil Nadu State GDDP data (Gross District Domestic Product) exists, but it often lags. RBI remittance data does helps, but that is largely available at the State level rather than district level.

However, these observations do find relevance in prior surveys conducted by the Tamil Nadu Government before COVID-19.  Districts such as Tiruvannamalai were often catagorized as relatively backward compared to more industralized districts where consumption pattern improved dramatically through manufacturing and urbanization.

Instability via MNREGA’s Distress Hills Data

One interesting way to study this phenomenon is from Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) employment data. MGNREGA data is measured in lakh person-days. (A lakh equals 100,000). In simple terms, it measures the amount of labor generated through a combination of workers and days worked under the scheme. 

Say for example, if 100,000 people work for 10 days, or 50,000 people work for 20 days, then: lakh person-days per 100,000*10 equals 10 lakhs person-days. And conversely 50,000*20 equals 10 lakhs person-days.

Sometimes, fewer workers, often work for many days or many workers work for fewer days. Thus, economists use person-days instead of counting only people.

In Tiruvannamalai the pattern of MGNREGA demand reveals a strikingly seasonal and distress driven rural labor cycle. Person-days generated surged to nearly 19.8 lakhs during May, before falling sharply toward November as agricultural activity resumed. The peak compared to it low variation is close to 5:1, creating what can be described as a steep “distress hill” in rural employment demand. 

Such a dramatic fluctuation suggests that a large share of rural households rely on MGNREGA not as supplementary employment, but as an emergency income stabilizer during periods of agricultural inactivity and cash flow stress. The intensity of the spike indicates the absence of diversified rural income sources, exposing the structural vulnerability of the local informal economy.

India Person Days 20260521

Tiruvannamalai District: FY monthly 2024-2025, from MGNREGA person-days shows sharp seasonal distress, peaking near 19.8 lakh person-days during May before collapsing toward November.

In contrast, the Madurai district in Tamil Nadu State presents a far more stable rural employment profile under MGNREGA. Peak demand was comparatively lower, reaching around 11.4 lakh person-days, while the decline across the year was considerably less severe than in Tiruvannamalai. The peak to low ratio was closer to 3:1, indicating significantly lower seasonal volatility in rural wage dependence.

India Person Days Madurai 20260521

Madurai District: FY monthly 2024-2025 displays a smoother MGNREGA employment curve with lower seasonal volatility, indicating stronger economic continuity and more diversified income generation.

Rather than exhibiting a sharp distress hill, Madurai’s smoother employment curve suggests a more diversified local economy. This because households may have greater access to non-farm income sources including urban linkages or more stable agricultural activity. The reduced fluctuation implies that MGNREGA functions more as a supplementary employment buffer than as a critical survival mechanism in Madurai compared to Tiruvannamalai.

Seemingly it is evident that consumption oriented businesses may struggle to scale in districts such as Tiruvannamalai, where disposable income growth and household surplus remain weak.

Industrialisation changes this dynamic because stable wage growth improves consumption depth and household savings. Without stable income growth, retail expansion and capital formation remain structurally weak.

The distress hill therefore represents far more than a simple employment fluctuation. The steep seasonal dependence on MGNREGA highlights how large sections of the rural economy remain vulnerable to agricultural cycles, with insufficient diversification, weak consumption resilience, and limited avenues for sustained wealth creation.

Notes:

Chart Sources: Ministry of Rural Development, Government of India, MGNREGA Dashboard (District level monthly person-days generated data).

Distress hills refers to my analysis of seasonal MGNREGA employment patterns to measure rural income instability and economic vulnerability. When plotted month-by-month, districts experiencing severe seasonal stress tend to exhibit a steep hill shape, characterized by sharp spikes in person-days generated during agricultural lean periods, followed by rapid declines once farm employment resumes. The steeper the hill, the greater the dependence of rural households on emergency wage employment for income stabilization.

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SouthAfrican Rand 20260520

South Africa Outsider: Thoughts on the Rand and Guest Observations

by with No Comment AssetsBehavioral SentimentCommoditiesExclusive ContentFeatured HighlightsForexInvestingRisk ManagementRobert PetrucciUncategorizedWorld

USD/ZAR Considerations as Water Flows and Political Concerns are Compared

As a guest of South Africa (because of a personal relationship) and having been coming here frequently during the past four plus years it is easy to love the nation. Early last week a severe storm which brought high winds and plenty of rain hit a lot of the Western Cape knocking out electricity and water in a variety of towns. Having experienced hurricanes in the past, the wind was not quite comparable, but the consistency of the gusts over two days caused major damage.

Electricity and water have been restored to most people now. Wifi remains a problem for some, but folks are surviving. The damage to homes, infrastructure in towns and agriculture will keep individuals busy for a while. However, the Western Cape because of good political leadership and the stoic mannerisms of the people have worked together to move forward. So what does this all have to do with the South African Rand?

SouthAfrican Rand 20260520

USD/ZAR Five Year Chart as of 20th May 2026

The USD/ZAR is traversing within a higher price realm since the start of March because of the Iranian conflict. The currency pair flirted with depths below 16.00000 in the middle of February. The value of the USD/ZAR at this time is close to 16.70000 depending on bids and asks. The Rand is correlating to the broad Forex market as USD centric strength has emerged recently, this as U.S 10 Year Treasury yields increase and threaten to become sustained. The U.S Federal Reserve is suddenly dealing with threats of inflation becoming sticky over the mid-term because of escalating energy costs. The U.S has plenty of WTI Crude Oil, but nations which had counted on energy from the Middle East are suddenly U.S customers and increased demand is going to cause WTI to remain elevated until the Iranian situation resolves. 

The USD/ZAR was in a bearish trend since early August 2025 when values were above 18.00000. The highs in early August of last year were caused by concerns the U.S White House sparked because of tariffs. South Africa is still facing tirades from the Trump administration about some policies being practiced in South Africa, but financial institutions have looked elsewhere regarding impetus for the Rand and its correlation to global Forex is the chief influencer.

While South Africa and its people and culture are easy to embrace, there are issues that remain problematic in the nation. Politics around the world often appear to be a complex myriad because certain people and partisanship are transfixed on power. Corruption globally is an issue in many nations that causes not only fiscal problems but inflation. South Africa suffers from these complications too. These matters can only be fixed with transparency and patience, and importantly – for citizens to demand better. 

Politically the current coalition government on the surface appears to be working. Yet, the potential for fractures to grow over the next handful of months as municipal elections approach –  the Johannesburg mayoral and city council results will prove fascinating, will be crucial for South Africa. Johannesburg has been facing a water supply crisis for a while and its consequences are a stark contrast to the Western Cape’s ability to repair and replace infrastructure in a matter of days after the recent storm.

The USD/ZAR is likely to correlate to USD centric price action near and mid-term, but there is a chance heightened political rhetoric and voting outcomes in a handful of months could shift impetus for a short while. Higher energy costs in South Africa now and into the mid-term will cause inflation. Food costs do appear to be incrementally rising in supermarkets. 

Yes, gold and platinum values will be looked at by some analysts and pointed to as reasons for the stronger South African Rand, and this influence may be real – to a degree. However for the moment, the USD/ZAR remains transfixed within the lower realms of its long-term price range mostly because the coalition government here is viewed positively, and the USD was weaker globally. 

The U.S Fed does have inflation concerns arising. As much as President Trump would like the new Fed Chairman, Kevin Warsh, to be dovish the reality for the U.S central bank and financial institutions judging outlooks lacks clarity for the moment. Sideways choppy price action in Forex and for the USD/ZAR may prevail in the coming days and weeks. And if the Iranian situation grows more boisterous, USD centric strength could grow.

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AMT Top 10

AMT Top Ten Miscellaneous Insights on the 18th of May, 2026

by with No Comment AMT Top TenAssetsBehavioral SentimentBusinessCommoditiesEquitiesFeatured HighlightsForexInvestingRisk ManagementUncategorizedWorld

Valuations and Drinking, Bad Storms and Politics Amidst the Resilient Nature of People

10. Resilience: The Western Cape of South Africa endured strong storm conditions last week. One of the hardest hit areas was the Cape Winelands District, but electricity and water have been widely restored. And a collective of people have proven working together can produce solid results when needed. 

9. Spencer Who: The Los Angeles mayor race is growing intriguing. A reality star turned social influencer threatens to become an influenza for his opponents. This as Spencer Pratt’s campaign gets noticed for its entertaining social media videos. This has caused many folks to ask what has happened to the state of politics and meaningful policy. But if NYC can elect a socialist, why can’t L.A elect an influencer and make some people feel sick?

AMT Top 10

AMT Top 10 Miscellaneous Insights for the 18th of May, 2026

8. Two Trillion: SpaceX early investors have agreed to allow a five for one stock split, meaning the company (and Elon Musk) are now aiming for a potential doubling of its worth when its IPO is initiated – on Nasdaq – in the second week of June. Some very serious accountants will be kept busy trying to show how SpaceX will produce enough revenue over the next twenty years in order to make a 2 trillion USD valuation palpable to future investors.

7. Drunk: Brown-Forman Corporation will begin its trading near $26.28 on the NYSE today. The company is the majority owner of Jack Daniels and other alcohol related enterprises. The value of Brown-Forman Inc. in June of 2021 was around 80.00 per share. The sobering phase of the public – particularly among young drinkers – to avoid bars and clubs, and instead stay on their mobile phones has hurt share values in many alcohol related companies. There are also concerns that too many drink companies now exists. Before Brown-Forman becomes the life of the party again, it appears some competition will have to go dry.

6. Deals: Prime Minister Modi visited Abu Dhabi a few days ago, and one of the results was an agreement to purchase and store energy reserves on a large scale in the United Arab Emirates. Modi also confirmed India’s strong connection to the UAE politically. While always trying to maintain a non-aligned stature, India appears to be moving closer to an increasingly important alliance with the UAE – which has also aligned with Israel strategically. The potential of these three nations acting together will ruffle feathers in a few noteworthy Middle Eastern and Asian countries.

5. Populists: President Trump’s tendency to say outlandish things and then suddenly turn around and show a willingness to negotiate terms has always been part of his art of the deal composite. However, saying what people want to hear and then turning on a dime and not delivering is also a symptom of populism. Trump isn’t the only politician suffering from this flaw. What do politicians really think, and how differently would they act if a they didn’t need votes for themselves or backers to remain in power?

4. Wall Street: After attaining apex highs early last week, the three major indices have taken a step backwards. Near-term concerns are effecting outlook as financial institutions balance risk averse tactics to long-term belief that sunnier days will prevail. While the Dow 30 didn’t set a record last week, the ability of the index to climb above 50,000 was noticeable. Equity markets appear tentative as this week begins and folks seemingly wait for more thunder and its potential effects.

3. Emirates: The UAE was attacked by drones yet again yesterday, this time at the Barakah nuclear facility. The hit has been downplayed, but highlights that military conflict with Iran remains very possible across the region. It is doubtful conversations are being conducted with polite undertones behind closed doors. The U.S, Israel and other nations are watching Iran – and Iran is watching them. The price of WTI Crude Oil remains a key barometer regarding the markets and concerns about the war igniting in full once more. Prices of oil remain sustained above $101.00 per barrel in the futures markets. The UAE might not want to be a focal point, but it isn’t backing down either.

2. Hawkish: The U.S Federal Reserve may have to actually consider raising interest rates before they can realistically discuss the notion of cutting borrowing costs, particularly if energy prices remain elevated and spark a sustained inflation threat over the mid-term. The USD started to show renewed strength the past few trading sessions in Forex, this as financial institutions compare their near-term anxiousness to growing concerns about mid-term ramifications regarding higher fuel costs.

1. Ego vs. Hubris: The U.S and China summit held largely in Beijing this past Thursday and Friday matched competing politicians and ideologies. In one corner U.S President Trump spoke with a rather inflated sense of himself while he detailed policy objectives and his perspectives. In the other corner Xi Jinping, the President of China, might have displayed some hubris as he warned the U.S about the Thucydides Trap. Xi expressed his belief that China is the emerging super power and that the U.S is a declining nation. However, China’s economy is known to be suffering because of a myriad of complex reasons, and could face more headwinds if energy prices and supplies remain hard-pressed.

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Indian Rupee 20260515

India Insider: Rupee Under Pressure as Oil Prices Surge and Import Bills Rise

by with No Comment AssetsBen EzraBusinessCentral BanksCommoditiesExclusive ContentFeatured HighlightsFinancial InstitutionsForexIndiaInvestingSpeculatorsWorld

Iranian War and Implications for India as Energy Prices Cause Vulnerability

India is currently facing mounting external economic pressures as rising global crude oil prices weaken the Rupee, widen the current account deficit, and increase the risk of imported inflation. As one of the world’s largest energy importing nations, India remains highly vulnerable to fluctuations in global oil markets. The recent surge in energy prices, combined with geopolitical tensions and volatility in currency markets, has intensified concerns among policymakers, economists and investors.

The Reserve Bank of India (RBI) has stepped up its intervention in the foreign exchange market to stabilize the Rupee, while the government is evaluating measures to reduce pressure on import billing. Rising fuel prices, weakening currency conditions and growing external imbalances have combined to create a challenging macroeconomic environment that may test India’s economic resilience in the coming years.

Indian Rupee 20260515

USD/INR Six Month Chart as of 15th March 2026

Gold and consumer electronics imports are increasingly being viewed as non-essential imports, and policymakers may consider restricting these categories in order to reduce stress on the current account deficit. Officials are concerned that a widening trade imbalance could place further downward pressure on the Rupee and increase dependence on foreign capital inflows.

The Rupee on Thursday fell to a record low near ₹95.95 per USD, making it one of Asia’s weakest performing currencies this year. The currency has erased most of the gains achieved following earlier RBI intervention measures aimed at curbing speculation in the Forex market. Analysts expect the Rupee to remain under pressure through 2026, especially if global crude oil prices continue to rise and significantly increase India’s import billings.

The impact of rising crude oil prices is becoming increasingly visible across the Indian economy. Private fuel retailers have either reduced diesel sales or raised prices in response to the rally in global oil markets, leaving state owned refiners to absorb a larger share of domestic demand. Long queues at fuel stations and rising transportation costs have intensified concerns over inflationary pressures.

Earlier today, State-owned fuel retailers raised fuel prices for the first time in nearly four years as New Delhi adjusted domestic pricing to reflect higher international crude prices following escalating tensions in Western Asia. Diesel and gasoline prices increased by more than 3%, even though Brent crude prices had risen by nearly 50% over the same period.

In New Delhi, diesel prices climbed to around ₹90.67 per litre, while gasoline prices rose to approximately ₹97.77 per litre. These are among the highest levels recorded since 2022 and reflect the growing burden of imported energy costs on the Indian economy.

Economists argue that the rise in fuel prices signals a gradual shift toward market based pricing rather than extensive government controls. Policymakers increasingly recognize that artificially suppressing fuel prices could worsen fiscal pressures and create larger external imbalances over time.

Currency Weakness and Monetary Policy Challenges

RBI Governor Sanjay Malhotra recently remarked at an event in Switzerland that continued currency weakness may be “only a matter of time” if global energy prices remain elevated and capital flows become increasingly volatile.

Foreign outflows during the year have already exceeded previous levels, while a sustained rise in crude oil prices above $100 per barrel could significantly widen the trade deficit and push India towards another period of pressure on balance of payments.

In this climate, attracting foreign capital via various tax cuts or raising the interest rates is paramount to reduce the pressure on the currency. It’s already been seen that New Delhi is working on reducing taxes for foreigners investing in Indian bonds.

Rise of Inflationary Pressures

Although India’s headline inflation remains relatively contained and below the RBI’s 4% medium term target, imported inflation risks are steadily increasing.

Economists also believe the RBI may eventually be forced to maintain tighter monetary conditions or raise interest rates further if energy prices continue to accelerate.

The central bank has already raised interest rates to around 5.25% this year, but several economists argue that further tightening may still become necessary.

Historical Perspective and Structural Risks

Economic historians often compare the current situation with the oil shocks of the 1970s. During that period, the United States was heavily dependent on imported oil. The oil crises of 1973 and again in 1979 contributed to inflationary pressures, balance of payments stress, and periods of USD weakness.

However, economists note that today’s global environment is significantly different. The United States has become one of the world’s largest oil and gas producers, reducing its dependence on imported energy. As a result, rising oil prices no longer weaken the U.S Dollar in the same way they did during earlier oil shocks.

For countries like India, the impact remains severe. India imports the majority of its crude oil requirements. Higher global oil prices directly increase India’s import billing and create additional demands for USD.

As Economist Philip Verleger was quoted by Bloomberg, “when you are a major oil importing nation, you are not only paying more for crude itself, you are also paying more for the dollars required to purchase it.” India is now facing this realization again.

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