Best of the Week: Let the Rupee slip, but not slide

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There’s something deeply unsettling about watching the rupee hit fresh lows almost every other day. It’s not just a number flashing on a screen, it quietly seeps into everyday life, from rising fuel bills to pricier groceries. And right now, the rupee is hovering near record lows of 94 against the US Dollar.

What’s changed? Not necessarily the intent of the Reserve Bank of India, but its approach. After weeks of actively defending the currency, the RBI seems to be stepping back, choosing not to fight every battle in a global storm it didn’t create.

With the West Asia conflict pushing crude oil prices higher and the dollar strengthening, economists believe the rupee is being allowed to act as a shock absorber. It’s a difficult but practical choice. Aggressively defending the currency now could mean draining precious forex reserves, something policymakers are understandably wary of.

Since late February, the rupee has already weakened by about 3%, while forex reserves have declined noticeably. Oil, now above $100 per barrel, is adding additional pressure, fueling inflation fears and widening India’s external vulnerabilities.

There’s also a sense of realism in the RBI’s stance. As one economist put it, trying to defend the rupee in such conditions is like “fighting against the wind.” You may hold the line briefly, but the tide eventually turns.

Still, this doesn’t mean the RBI has stepped away entirely. The effort now is more nuanced, letting the rupee find its level while stepping in to prevent panic or excessive volatility. Read everything about Rupee and RBI in this story by Subhana Shaikh.

On to the best of Mint’s journalism from this week:

Why central banks are holding their breath

What happens when the world becomes too uncertain to predict? You pause. That’s exactly what major central banks, from the US Federal Reserve to the European Central Bank have done this week. Just a month ago, rate cuts seemed likely. Today, with war disrupting oil supply and prices soaring past $100, policymakers are in a bind. Raise rates, and growth suffers. Cut them, and inflation spirals. For India, the ripple effects are already visible with a weaker rupee, rising yields, and a looming policy dilemma for the Reserve Bank of India.

IPL riches, hidden gaps

The Indian Premier League is back, and so is the hype, the money, and the madness. But behind the sixes and sponsorship deals, is the IPL really making as much as it should? Yes, team sponsorships have crossed ₹1,000 crore, and big names, from Temasek to Adar Poonawalla, are eyeing stakes. But media rights? That’s where things get tricky. With more viewers shifting online, streaming revenues aren’t keeping pace with TV. Which results in a growing “monetization gap.”

Are IIM dreams still worth it?

In a job market clouded by AI fears and global uncertainty, there’s a bright spot of IIM salaries rising again. But does that tell the full story? Top campuses like Indian Institute of Management Calcutta and Indian Institute of Management Lucknow are seeing median packages climb sharply, up 25-40% from pandemic lows. The reason? More specialised, high-value roles in consulting, tech, and product leadership. Hiring remains selective, and experts warn this surge may not last.

Why condoms may cost more

It’s not something we usually think about, but what if a global war quietly made protection more expensive? India’s condom makers, HLL Lifecare to Mankind Pharma are facing a serious squeeze. Key inputs like silicone oil and ammonia are in short supply, thanks to disrupted trade routes in West Asia. This could result in sharp rise in prices, and slower production. Even small price hikes can reduce access, especially for vulnerable groups.

Nifty at 19x: Cheap enough yet?

After months of feeling “too expensive,” Indian markets are finally catching their breath. The Nifty 50 now trades around 19x earnings, below long-term averages and even cheaper than peers like Japan and Taiwan. Sounds like a buying opportunity? Maybe. A 12% correction, global tensions, and ₹1.25 trillion in FPI outflows have reset valuations. Yet, will foreign investors return, or wait for even better bargains?

FPI sell-off deepens as West Asia war rattles markets

Foreign investors are pulling out of Indian equities at a pace even sharper than during the pandemic. FPI assets dropped $79 billion to $710 billion in early March, the steepest fortnightly fall in six years, driven by both selling and market declines. As the West Asia conflict intensifies, investors are shifting to safer dollar assets, worsening outflows. Rising crude prices, up 56%, and a weaker rupee are adding to concerns over India’s current account deficit and earnings outlook. With ownership at a 15.5-year low, FPIs remain cautious, dragging benchmark indices closer to recent lows.

Weight-loss drug boom meets regulatory brake

India’s weight-loss drug rush has hit a speed bump. After semaglutide went off-patent, triggering a wave of cheaper copies, the regulator has stepped in to curb misuse. The DCGI has asked states to ensure only endocrinologists prescribe these drugs, following raids on wellness centres offering them without proper oversight. The concern is clear: while falling prices could expand access, the drug carries serious side effects that need expert monitoring. With India’s obesity burden rising and demand surging beyond diabetes care into lifestyle use, the move aims to balance access with safety as the market rapidly scales up.

Ethanol push gains momentum, but at what cost?

As crude prices spike amid the West Asia conflict, India’s ethanol makers are pushing for higher fuel blending and a shift to flex-fuel vehicles. The country has already hit 20% blending, cutting import bills and boosting farm incomes. But scaling up further raises tough trade-offs. More ethanol means diverting food crops like rice, maize and sugarcane, potentially straining water resources and worsening dependence on edible oil imports. Farmers are already shifting acreage away from pulses and oilseeds. While ethanol helps energy security, experts warn the next phase needs balance, or it risks solving one problem while creating another.

From guano wars to gas shocks: a fertilizer crisis brews

What began as 19th-century wars over bird droppings now echoes in a modern crisis shaping global food security. The invention of synthetic fertilizers by Fritz Haber made agriculture scalable, but also deeply dependent on energy markets. Today, India’s fertilizer supply chain is exposed as the West Asia conflict disrupts gas flows and imports. With urea production hit and stocks under pressure, farmers and policymakers face tough questions ahead of the kharif season. Can India secure supplies in time, or will shortages, rising costs and panic buying ripple through food production and inflation?

Inside HDFC’s boardroom mystery

HDFC Bank is leaving no stone unturned after Atanu Chakraborty’s abrupt exit, appointing external firms like Trilegal and Wadia Ghandy & Co to piece together what may have gone unnoticed. Their task is simple in theory but complex in reality, scan through past boardroom minutes and identify if any red flags were missed. The board insists it had no inkling of any issues. The central bank, Reserve Bank of India, has also maintained that there are no governance concerns on record. Was this a case of subtle signals slipping through the cracks?

That’s all from us this week. Subscribe to our newsletters and the website for what’s in the news and beyond it. Write to us at newsletters@livemint.com.