Where is the rupee headed? Financial Express 20th March 2026

 The Iran War has evidently turned the markets upside down. What appeared to be going well for the world economy has now become an uncertain spectre. The stock market continues to display nervousness with no end in sight. But a factor which affects all countries is currency, and the rupee is once again under pressure. With the Rs 92 mark being breached, the logical question is, how much higher or lower can it go?

The answer is really a shrug because one does not know the intensity and length of the war. The rupee will be driven by two sets of factors—the fundamentals (imports, remittances, foreign portfolio investors [FPIs]) and the strength of the dollar. This is the challenge for the Reserve Bank of India (RBI) which has, so far, dexterously steered the currency away from volatility. The issue is that whenever one speaks of the rupee, it is necessary to also see how other currencies are faring. Absolute depreciation numbers do not connote much as the current spate of movements is interlinked with what happens to other currencies.

Within the fundamentals, the obvious factor pressuring the rupee is the higher cost of imports. As oil is the largest component of the basket, any increase in price gets added to the trade deficit. Products like fertilisers and chemicals also get affected indirectly, which widens the deficit. On the other hand, the increase in exports may not work out given that the direction is also to countries embroiled in the war.

As for remittance flows, there is a large expat population in the Gulf and other western countries. This segment has been a useful contributor to remittance flows that has strengthened the current account deficit even when the trade deficit was high. Remittances from this region could be around 35% of the total, which is significant, given that the country could be getting anything between $135 billion $150 billion in good times. Also the expat population in this region could tend to belong to the low-skilled labour class whose earnings are also not very high. This means that any job loss or reduction in pay can lead to a sharper fall in remittances. This contrasts with the western world, where the population tends to be in high-skill jobs.

FPIs have been quite destabilising in the last couple of years, especially at a time when the West is going in for quantitative tightening, which has lowered the quantum of investible funds. To top it all, any news on tariffs has caused the funds to shift markets, which is now exacerbated by the war. Therefore, these flows will have a bearing on the daily movement in currency.

The conundrum here is that investments are based on how investors see markets and growth of economies. Further, currency stability is important as a declining rupee will mean lower real returns. Therefore, the end result is always uncertain. Indian markets were not the best performing ones until the war began as there was a sense that stocks were overvalued. Hence, the review of alternative markets that will be made by these investors will guide these inflows.

Normally, all these fundamental factors are represented by the change in forex reserves. Here, the economy is in a strong position as reserves are comfortable at over $700 billion covering around 11 months of imports.

Beyond fundamentals lie the external factors. Speculative forces are important here. A falling rupee will make importers rush to buy dollars, while exporters would like to hold back retracting their dollars, hoping to get more rupees once the conversion takes place. This becomes self-fulfilling and hence the RBI’s action becomes important. As a custodian of forex assets, the RBI has been stepping in often to ensure that these forces are curbed ,through the outright sale of dollars or taking forward positions, which sends strong signals to the market. The positions in the non-deliverable forward market provides good indications on this aspect.

But when it comes to what happens to the dollar, no central bank can do anything. When the dollar strengthens, there is a tendency for other currencies to weaken. The dollar index has moved closer to the 100 mark, which has automatically pulled other currencies (including the rupee) down. The trick is to ensure that the rupee remains within range and does not lose out on the depreciation, which will help retain export competitiveness without making it appear as a weak currency. Once again, it is the RBI that holds the strings.

Presently, it is hard to guess which way the dollar will go. With gasoline prices already climbing, inflation should increase in the US, causing the Fed to pause rate cuts. This means the dollar will strengthen. However, an unending war will impose more pressure on the dollar as it would not reflect well on the economy.

The rupee, though depreciating, looks satisfactory on a comparative scale. Being a country with a current account deficit means that the rupee should weaken. This is more so at a time when the capital account has been weak with negative FPIs and low, single-digit foreign direct investments, as repatriations are high. The present exchange rate of above Rs 92/$ does not look off the mark, though the indications going by the non-deliverable forward market talk of Rs 93/$ in the next couple of months. A conservative approach will be to look at a range of Rs 92-93/$ for the next month or so.

Will the new series of GDP accomplish anything? Free Press Journal 16th March 2026

 

One for the novice: Book review of Booms, Busts and Market Cycles: Book review in Financial Express 15th March 2026

 One thing that will catch the reader’s attention is the author's analysis of returns on housing compared with equities (Source: Bloomberg)

Maneesh Dangi is an office-hold name when it comes to stock markets as his views on television are closely followed by dealers in their offices. It is quite appropriate that he has written a book on how to train one’s mind to be an investor in his book Booms, Busts and Market Cycles. As the title suggests, he takes readers through all these phases with clear guidance on how to read such situations and invest smartly.

He does give a lot of advice, but the one thing that will catch the reader’s attention is his analysis of returns on housing compared with equities. It is more of a revelation. He argues that returns on housing over a long period of time are the same as equities across the world, which is around 5% in real terms. And the more important part is that the volatility in housing is just half of equities, which means it may just be a better opportunity with the risk carried being much lower. This can be a useful tip to consider when individuals are looking to diversify their portfolios to maximise returns as housing is not often treated as part of asset portfolio diversification.

Dangi also takes the reader through asset allocation, which he links with age profile as this gets linked with requirements. At age 25 one should opt for equities. When one is 45, he advises to trim exposure to equities, bringing down share to 15%. At age 65, one should be out of equities and invest only in short-term funds, that, too, only after exhausting all options open to senior citizens. This is the time to move away from markets for sure. He goes one step further and signals to high networth individuals to try out the US equity markets, along with diversified or index funds in the domestic market.

Dangi gets more eloquent when he writes about knowing the fund manager. Here his insights are very interesting. A thought which may not have occurred to the reader in the normal course is that the sum of all strategies in the market must be equal to the market return. So the question is who gives the alpha to the investor? There are mutual funds as well as DIIs and FIIs as well as the retail investors who are all in the game. The promoters interestingly hold around half of the equity across the world and are supposed to be the outperformers and rarely buy or sell as they are the ones who have skin in the game.

So who really are the gainers? Here he points out that it is not the FIIs who derive the alphas as they work based on benchmarks. It is the retail investors who hold 8-10% who contribute to the alphas in a negative way. They are the losers on the basis of which others gain. Their shortfall become the excess returns for others.

He simplifies some principles for the reader on how to choose portfolio managers. He gives tips like being wary of portfolio managers who have never struggled. Or to stay away from performance artists. Again, the chapter on interpreting markets is quite engaging as it also warns us on interpreting certain observations as a phenomenon. Often a crowded mall can make us conclude that consumption has revived and the stocks of such companies will do well. It does not work that way. He prefers to use the first derivative of change rather than absolute inflation or GDP numbers.

Dangi prefers PMI to IIP numbers to gauge the economic environment. Markets are better indicators than macro trends. Copper tells us what is happening in China. S&P tells us on risk appetite. The dollar reflects the global mood. Most importantly, and with a bit of irony, he warns investors to be wary of policymakers because they guide people to be calm when inflation is about to rise. 

Boom, Busts and Market Cycles is a very insightful book. Written in a different style with conversations between two characters, Dangi is able to deliver some useful tips and advice on investing in a language that is easy to understand. One can start reading the book from any chapter and it is not necessary to go sequentially as these are standalone chapters.

He also gives his views on the economy, which can be contested by economists. He talks of inflation being high at 4%, which is higher than the Asian counterparts due to high public debt. Here data would show that high inflation has normally tended to go with high food prices which are driven by supply factors rather than demand. He is suspicious of household debt rising in the unsecured space, which he feels is not a good sign. Here, too, it is arguable whether it is a bad thing given that the NPL ratio is low. The counterview is that this has supported growth in consumption, which would have lagged in the absence of leverage.

Similarly, he believes our GDP growth will be 6% on a continuous basis. This may be too pessimistic of the growth story as 7-8% seems to be the path that can be achieved. In fact, this path can probably not convince investors of the continued good returns in the market. But then, it is the author’s view coming from someone who has been in the market for long to understand what works. But then he does end by saying that equity valuations are rich but lack macro support. This is definitely a book for the shelf as Dangi writes with conviction and strongly puts forward his views on the subject.

Economy may survive war supply shocks : Businessline 12th March 2026

 The current oil crisis is the fourth in the last four years. The first episode took place when Russia invaded Ukraine which saw crude price moving from around $84/barrel in February 2022 to $117 in March and remaining in a higher range till September, when it moderated to $90/barrel before reverting to around $80/barrel in December.

Therefore, the higher prices lasted for almost nine months. In this episode, Russia was a major supplier of oil (third largest with share of 10-12 per cent). With a ban being imposed on imports by the western community, supplies were disrupted.

The second was the Israel-Palestine conflict in October 2023 but its price impact lasted for just about a month. This is because no oil producing country was involved in this conflict.

Book review of World Cup fever: A footballing journey in nine tournaments : Financial Express 8th March 2026

One of the biggest sporting events will be the World Cup Football tournament to be held this year. It is probably in league with the Olympics given the scale of participation of nations, and scores over cricket, which is restricted to a handful of teams. Just what goes on behind the scenes is something one would like to know; and this is where Simon Kuper of the Financial Times does well in both narrative and style.

The book, World Cup Fever, is described quite differently. The author has followed the tournaments since 1990, not having missed a single one. He covers this period of 32 years by talking of individual matches he attended. Quite clearly, he has been maintaining a diary on what has transpired in these matches as the descriptions are vivid. He also talks of the towns and cities he visited in this process, adding glimpses of the cultures of the countries where the world cup was played.

Curiously the first five tournaments were played in the developed world while the ones that followed did not follow any such pattern and included countries like Brazil, South Africa, Qatar and Russia. And this in a way was a case of multinational capitalism invading the Global South. Or one can say there has been democratisation of the sport.

 Anyone who has followed the sport will find these narratives refreshing as one can identify with some of these matches. Now, what comes as a revelation to the reader will be the politics and money that go behind these games. It is a prestige to hold the tournament irrespective of whether the country is a soccer-playing nation or not. There is huge pressure on FIFA and there is big money involved. Large sums are transacted in the bidding process so that the clubs involved will vote for the winner. Therefore, things are not simple. Kuper takes us through all these machinations while covering individual tournaments sequentially.

Another point that emerges is the hypocrisy involved when this process is on. Countries like Russia and Qatar are known for being autocratic and regressive. Russia got the 2018 bid even after the invasion of Crimea. Such a nation should ideally have been boycotted. Russia as well as Qatar are not really soccer-playing countries but have used these world cups as a means to ‘sportswash’ their images. One did read about the labour conditions when the tournament was staged in Qatar.

Labour is virtually indentured and several people died. Yet, holding the tournament was a desperate measure used to change the country’s image. Significantly several players who had decided to wear black bands as a signal of protest before the tournament changed their minds and made it look like all was okay. The same was seen in Russia where even the public were least interested in the game, including the matches played by Russia. It was more a show of power and comradeship by President Putin. There were few signs on the roads that a big tournament was on.

Kuper also reveals that with a lot of jingoism setting in, audiences everywhere are only interested in their teams playing and winning. Hence even in a country like Brazil, people were attending matches only where their team was playing. This is a problem that has permeated all sports in the world where nationalism prevails. This is witnessed with the national anthems being played, which adds to the parochialism.

Kuper also highlights the tournament in South Africa in 2010 where despite the so-called withdrawal of apartheid, there was clear segregation of the coloured and white population. This was not just in the social circles but also in stadiums and team compositions.

The author points an interesting aspect of the World Cup. The winner of the tournament normally has to play just seven matches and be lucky. Often the team wins by a solitary goal margin, or more often these days on penalties. Is it a fair way of adjudication on the best team playing or is it just fluke?

High Cost of a Growing Football Economy

Further, a tournament that started off with 16 teams in the Seventies increased to 32 in 1998 and will now be 48 in 2026. For 2030, the number is likely to touch 64. All this means that there are more matches with more sponsorships and more ticket sales. Add to this the telecast and broadcasting rights, and there is lots of money involved with various brands making their bids to various title sponsors.

Therefore, the World Cup is a big economy that starts at the bidding process. The country which gets this opportunity would be spending a lot on infrastructure which typically would be helping the country to grow. But the costs involved, as has been seen in countries like Brazil, have been quite high with environment and labour issues being the prime casualties. In fact, the author highlights how the world cup “became a symbol of the state’s corrupt incompetence”.

The book is enjoyable to read even for a non-soccer fan as it takes one through the various tournaments over the past three decades. One can also catch up with the Zidane incident of headbutting in the finals and what supposedly led to the rather rash impetuous action. The 2026 tournament will be in the USA and it can be a big publicity event for President Donald Trump as it would involve a number of countries in the neighbourhood participating after being at the receiving end of his economic doctrines. The author believes that world cups hence do not change the world, but only illuminate it—these words come from a diehard fan of the sport.

There's urgent need for ground rules for the healthcare sector: Free Press Journal 2nd March 2026

Why the concern over capital flows : Hindu Business Line 28th Feb 2026

 The RBI’s new regulation on ECBs (external commercial borrowings) can be read along with the message given in the Economic Survey on the rupee being under pressure in the year. This is notwithstanding an otherwise remarkable performance of the economy.

The current account deficit is very much in control even though the exporters have faced challenging times. It is the capital account that has been transformed, putting pressure on the currency. The measures announced by the RBI on the amount and tenure of borrowing will surely help companies raise more money in this market and support the capital account.

Historically the capital account was kept steady by FPI and FDI which have become more fragile. While often it is argued that we need to be more open to such investment, polices have been comprehensive; and it does look like that nothing substantive can really be done. FDI can flow into almost all sectors with limits being increased over time. The challenge is to have investors interested in the India story. It is the pull factor rather than push which matters here.