Cockroaches, Pink Lizards and the Rupee: Should It Find Its Own Level?
- Sidharth Singh
- 2 days ago
- 12 min read
Updated: 1 day ago
Long time no see, right?
So what should I call you all now?
Students? Future of the nation? Demographic dividend? Human capital?
Nope! Nope! Nope!
Apparently, the latest update is "cockroaches."
That Dance India Dance (DID) Season 3 (2012) contestant, right? Raghav Juyal?
Ohhhhh...Not that one. The insect one. Got it. Got it.
But the more I thought about it, the more similarities I found.
The only difference is that Raghav used to dance on beats created by musicians, and judges used to judge him based on how well he danced.
We cockroaches, on the other hand, are judged based on how well we dance on beats created by society, politicians, governments, corporations, and social media algorithms.
And our judge?
A 64-year-old—the 53rd Chief Justice of India—Surya Kant Sir.
Apparently, we are being judged for not dancing on the beats of the government—just like he does. Peeche se yeh kaun chilla raha hai..... "Retirement ke baad Rajya Sabha ki seat bhi toh chahiye..." Sir, yeh youth kuch bhi bolta hai...Mai apke sath hun... Meri maano, aap bahut mast kaam kar rahe hain... Itna mast ki aapko toh weekends par bhi kaam karna chahiye...
Am I saying it right, Narayana Murthy Sir?
Let's start the 80-hour work culture with the judicial system.
Not just 80. Let's push it to 100 hours.
So, can Narayana Murthy Sir give the next statement asking courts to work 80 hours a week?
No, he can't. (But sir, woh China ko peeche chhodna tha...)
Because the judicial system is not as easy a target as corporate employees, working professionals, or the youth of India. And when it comes to pending work, Indian courts are among the most inefficient organisations. But who are you to judge him as a parasite kahi ke…
But he was not completely wrong.
We only assume that things are under our control, but the reality is that we are carrying thousands of thoughts in our heads and don't know what to do with them.
Just consuming..... Consuming...... Consuming.....
You wake up, see a reel on "protect your peace," and suddenly you want introspection.
The next reel is about eating healthy, and now you're looking at your belly.
The one after that is about becoming a billionaire at 30, so you decide that's enough internet for the day.
"Nowadays, people will tell you what to think, when to think, and where to think. But they will never teach you how to think."
Because the day you learn how to think for yourself is the day you stop needing them.
And if that happens, why would you ever come back?
So dear, most efficient, superhuman Surya Kant Sir,
If we can accept Prime Minister Narendra Modi as the 11th incarnation of Lord Vishnu, then surely we can also accept Surya Kant Sir as a super-serum-injected superhuman working day and night.
Because apparently ordinary human limitations don't apply here.
A state where weekends are unnecessary. And the human brain comes with unlimited RAM.
But sir, I respectfully disagree. If we're being assigned reptiles and insects, And if species allocation is officially underway, I would like to file a request for transfer. I'd like to apply for a transfer to the lizard department. Not just any lizard—the pink one with the giant sparkling eyes.
At least it looks like it's starring in a Disney movie instead of hiding behind the refrigerator. And from a biological perspective, it's an upgrade. Why would I want to be a cockroach with a complicated 13 chambered heart setup when I can be a chill lizard with a simple three-chambered heart, sunbathing on a wall and minding my own business? Think about it.
Have you ever seen a stressed pink lizard?
Worried about GDP growth?
Concerned about exchange rates?
Preparing for UPSC?
Trying to understand Relationships?
No.
The pink lizard has achieved what philosophers have been trying to explain for hundreds of years. Meanwhile we humans are busy collecting anxiety like Pokémon cards. If the choices are:
Cockroach: runs when the lights come on. Pink lizard: poses dramatically and blinks with huge eyes.
I'm choosing the lizard. Let the cockroaches have the bureaucracy; I'll take the aesthetics. Don't say you don't like my broken humour.
If she had been here and heard this, she would have laughed so loudly as if there was no tomorrow.
So loudly that her laughter would have been heard across all seven continents.
And then we would have started judging why the hell everyone was looking at us.
CJI Surya Kant Sir jitne acche judge toh nahi hain... Par thoda bahut judge toh hum bhi kar lete hain...
Police officers seem interested in becoming new instagram influencers.
Chief Justices seem interested in commenting on the work ethic of the youth.
Human beings are busy searching for meaning while scrolling past it every day.
And engineers...
Engineers are apparently busy writing articles about cockroaches, pink lizards and exchange rates. Sasta writer kahi ka....
Look at the irony.
Now, before you start judging me, remember that you were just introduced as cockroaches a few paragraphs ago. So I think we're all in no position to judge anyone. So now that I have successfully grabbed your attention...
And probably lost half of it already...
Let's loop back to The Real Topic.
Should the RBI defend the rupee, or should it let the currency find its own level? So, as we all know, the sharp slide in the rupee's exchange rate has sparked a debate (not that news channel one) on the Indian economy. The urgent policy decision before the Government of India and the Reserve Bank of India (RBI) is whether to prevent the rupee from sliding further against the US dollar or to let it fall and find its true level.
The rupee's exchange rate against the US dollar basically changes depending on the relative demand for the two currencies in the foreign exchange (forex) markets. If Indians demand more dollars (either to buy foreign goods or invest in other countries) than the rupees demanded by foreigners (either to buy Indian goods or invest in India), the relative value (exchange rate) moves in favour of the dollar.
Simple.
Well...
Simple in theory.
The worsening of the rupee's exchange rate is reflective of a weakness of the Indian economy.
And before somebody gets offended, currencies are a lot like report cards.
Nobody likes them when the marks are bad.
But the report card is not responsible for the marks.
It merely reports them.
The rupee is often doing the same thing.
It is simply reflecting realities that already exist.
Exams se yaad aaya...
I just got to know that the government will be using the Indian Air Force to transport NEET question papers because they want quick transportation.
Now isn't that, in itself, an admission of failure?
The largest democracy in the world.
A country that dreams of becoming a developed nation.
A country that talks about becoming a $5 trillion economy.
And yet we have reached a stage where exam-conducting authorities require the Indian Air Force to ensure that question papers reach safely and on time.
No offence, but that sounds less like efficiency and more like a lack of confidence in the system that was supposed to do the job in the first place.
But this immediately reminded me of the movie Sam Bahadur based on India's first Field Marshal, Sam Manekshaw.
There is a scene where he says:
"Mistri chahiye toh de sakta hoon, fauji nahi."
And honestly, that dialogue perfectly fits here.
If you want quick transportation, use civil aviation with security.
Fix logistics.
Fix administration.
Fix the system.
The Indian Air Force has more important responsibilities than covering up the shortcomings of a broken examination ecosystem.
The day one institution starts compensating for the failures of another, we may solve the immediate problem, but we quietly create a bigger one.
Anyway...
Coming back to the rupee.
Just like question papers, currencies also have an annoying habit of exposing weaknesses in systems.
How can the rupee's exchange rate be artificially improved?
The RBI can ensure that dollars are not used for regular transactions within the country. Eventually, those dollars find their way back to RBI. This will allow the central bank to artificially boost the rupee's exchange rate whenever it feels the need.
The RBI can sell the dollars it holds in the forex market, thereby increasing their supply. At the same time, it buys rupees in return, thereby increasing demand for the rupee.
This is referred to as RBI defending the rupee.
Think of it like a parent secretly supporting a bicycle from behind while a child learns to ride.
The child feels stable. The child feels confident. The child believes everything is under control. The support is real. The confidence is real. The only problem is that eventually somebody has to let go. And that is the difficult part which connects us to our next question.
How does RBI decide when to defend?
The RBI's official policy line has always been that it does not target a certain level of the rupee. Rather, its concern is that the movement in the rupee's exchange rate should be orderly.
In simple words, RBI gets uncomfortable when the rupee starts behaving like cryptocurrency.
If it believes the rupee is falling (or rising) too fast, it steps in.
This makes perfect sense because RBI's primary responsibility is maintaining financial stability.
Imagine you are a student planning graduate studies in the United States.
One day your tuition costs ₹40 lakh. The next day ₹45 lakh. The next week ₹50 lakh.
At some point, your education loan would start behaving like a stock market investment.
Similarly, imagine being an importer or exporter trying to run a business while exchange rates are doing parkour every morning.
Markets can handle change. What they struggle with is chaos. And RBI's job is not to eliminate gravity. It is simply to stop people from jumping out of windows because gravity exists. But does it actually work?
Does defending the rupee work?
In the short term, yes.
The foreign currency reserves — the main component of India's forex reserves — have remained broadly stable over the last several years as RBI deployed more and more dollars from its kitty to defend the rupee.
But...
But...
But...
Economics is one of those subjects where every solution arrives carrying a side effect.
Over the medium term, RBI's strategy of selling forex often comes a cropper because eventually the rupee has still fallen sharply.
Now before somebody accuses me of writing philosophy instead of economics, let's look at some actual numbers.
Because unlike Indian television media, numbers occasionally help.
The chart below shows India's foreign exchange reserves, foreign currency assets and the rupee-dollar exchange rate over the last two decades.
And at first glance something looks strange.
Forex reserves have gone up.
Foreign currency assets have gone up.
India's economy has grown.
Yet the rupee has still weakened from around ₹46 per dollar to over ₹88 per dollar.
Which is exactly where things start becoming interesting. Take a moment and stare at that chart.
No seriously.
Stare at it.
Because that single chart explains why the RBI-versus-market debate is far more complicated than most people assume.
If accumulating reserves alone could permanently strengthen a currency, this chart should have looked very different.
Instead, what it shows is that while reserves can slow the journey, they cannot always change the destination.
And that brings us to the next question.
If RBI has all these reserves, why can't it simply continue defending the rupee forever?
Why can't RBI defend the rupee like it did earlier?
There are two main reasons.
Firstly, policymakers like to maintain around ten months of import cover — enough dollars to continue necessary imports for at least ten months.
After RBI reaches a certain threshold, it has to pause and reconsider.
Because reserves are a lot like savings.
Everybody likes spending them.
Very few people enjoy watching them disappear.
And secondly — perhaps the more important reason — is the quality of India's forex.
Most of the forex with RBI comes to India in the form of investments and not from money earned by selling goods to the rest of the world.
This is a subtle point.
But it changes everything.
China largely earns its dollars.
India often attracts its dollars.
One is income.
The other is confidence.
Income belongs to you.
Confidence belongs to somebody else.
And confidence is a strange thing.
It takes years to build. Months to lose. And one bad headline to test.
As we have seen repeatedly, investors can pull money out of India if they find another destination more attractive or if they lose confidence in growth prospects.
Which is why some economists argue that a part of India's forex reserves behaves less like an asset and more like borrowed confidence.
China's trade surplus generates forex that nobody can suddenly withdraw.
India, meanwhile, still spends more dollars importing than it earns exporting.
And that difference matters. A lot.
Why not let the rupee find its level?
Mainstream economists regularly advocate this.
Their argument is beautifully simple.
A weaker rupee should help India's exports. At the same time, imports become more expensive, which should reduce their demand. The net result should be a reduction in the trade deficit — the gap between imports and exports.
Moreover, if RBI allows the rupee to find its own level, neither would the central bank have to burn through its foreign exchange reserves nor would the government have to worry about continuously defending the currency.
Sounds perfect.
In fact, it sounds so perfect that it belongs in a textbook.
And that is precisely where the problem begins.
Because reality has an irritating habit of refusing to read textbooks.
Economists often assume that human beings behave rationally.
But in reality
Reality is messy.
Human beings are messy.
And economies are simply millions of messy human beings interacting with each other.
Which means that what works beautifully on paper doesn't always work beautifully in practice.
India, unfortunately, is one of those cases.
There are several peculiarities in the Indian economy that suggest letting the rupee freely find its own level may either have very little impact or, in the worst-case scenario, accelerate the very decline policymakers are trying to avoid.
In other words, the medicine may end up strengthening the disease.
And that is where things start becoming interesting.
The textbook argument sounds beautifully simple.
A weaker rupee should make Indian exports cheaper, imports more expensive, and eventually reduce the trade deficit.
For starters, a significant part of India's exports are re-exports. We import components, process them, and then export the finished product. So a weaker rupee doesn't just make exports cheaper; it also makes imported inputs more expensive. The gain on one side is often accompanied by pain on the other.
Then comes competition.
Economists sometimes discuss exports as if India is the only country trying to sell things to the world.
It isn't.
Bangladesh exists.
Vietnam exists.
And neither of them wakes up every morning thinking about India's exchange rate. They wake up thinking about how to beat India. The buyer sitting in New York or Berlin doesn't care whether the rupee weakened by 5%. He cares about price, quality and delivery. The market decides. India merely participates. And then comes my favourite part of economics: human psychology.
Suppose you are an importer and you expect the rupee to weaken further. You rush to buy dollars today. Now imagine thousands of importers thinking the same thing. Demand for dollars rises and the rupee weakens further.
The exporter plays the same game in reverse. If he expects the rupee to weaken, he delays bringing dollars into India because those dollars may fetch more rupees tomorrow. Rational for him. Not so great for the currency.
Investors are no different. A falling rupee makes them wonder whether their gains will survive once converted back into dollars. Some stay. Some leave. Some stop coming altogether.
Everybody is acting rationally.
Collectively, they are creating the very outcome they fear.
The importer expects depreciation.
The exporter expects depreciation.
The investor expects depreciation.
And the combined result?
More depreciation.
Because at the end of the day, an economy is not a machine.
It is a collection of human beings.
And human beings, unlike equations, have feelings.
Unfortunately, markets price those feelings too.
So what is the solution?
So when it comes to economics, consider me a failed student.
Honestly? I don't know.
And that is probably the most honest answer in this entire article.
Do I know whether RBI should defend the rupee or let it find its own level?
No. Do economists know?
Some think they do. Most disagree with each other. Does RBI know exactly what to do?
Probably not.
And that's not a criticism. That's reality.
Because contrary to popular belief, policymaking is not a multiple-choice examination where the correct answer is hidden at the back of the book. Sometimes the answer only becomes obvious years later. Sometimes the answer is discovered through time.
And perhaps that is true not just for economics but for life itself.
The real question was always something else.
Just like this article was never really about economics.
It was about...
Should you spend your entire life trying to control everything?
Or should you occasionally accept that some things have a level of their own and will eventually find it—with or without your permission?
Maybe RBI should intervene. Maybe it shouldn't. Maybe life is exactly the same.
We spend so much of our lives searching for certainty.
The perfect decision. The perfect career. The perfect relationship. The perfect timing. The perfect answer.
But what if some answers are not meant to be found perfectly, or immediately?
What if some answers are only revealed by time?
And tell you what? Maybe that's okay.
Maybe uncertainty is not something to be feared. Maybe it is something to be accepted.
Embraced.
Even enjoyed.
Because uncertainty is the reason hope exists. It is the reason surprises exist.
It is the reason tomorrow exists. So don't run away from uncertainty.
Accept it.
Embrace it. Laugh a little. Call your friends/ family/ the people you care.
Hug your loved ones. Tell people that you care about them.
Because life is so uncertain that you never really know when you're seeing someone for the last time.
Maybe the last conversation doesn't announce itself.
Maybe the last hug doesn't come with a warning label.
Maybe the last goodbye doesn't even look like a goodbye.
And that is precisely why today matters.
Some battles are worth fighting.
Some outcomes are worth influencing.
And some things are simply too large, too complex and too chaotic to be controlled completely. The older I get, the more I realise that human beings spend most of their lives negotiating with reality. Most of the time, we settle somewhere in the middle and call it experience. This is your simple guy with a four-chambered heart. Or may be three?
Some call me ignorant.
Some call me arrogant.
Some call me heartless.
Maybe they're right. Maybe they're wrong. Or maybe...
I don't have a heart at all.
Maybe I have one, made of Fullmetal.
So just remember... Even if this world is a cruel place,
Respect your work.
Protect your folks.
Nourish your soul. Keep Moving Forward. Thanks for reading. Your flawed pink lizard. ~ Sidharth Singh
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