Stock market strength is now rupee’s curse
- Swaminathan Anklesaria Aiyar
- Updated: May 23, 2026, 21:40 IST IST
Why is the rupee falling like a stone? The exchange rate was Rs 85.8 to the dollar at the start of 2025, fell to Rs 90 by the start of 2026, and then touched a record low of nearly Rs 97 last week.
The rupee is sinking mainly because Indian stock markets are overvalued compared with their peers. So, global money is leaving India for other emerging markets and the safe havens of the West. An astonishing $53 billion has exited Indian stock markets in the last 18 months. What looks like a success—strong markets—has enabled foreign portfolio investors (FPI) to exit at a high price.
The rupee is sinking mainly because Indian stock markets are overvalued compared with their peers. So, global money is leaving India for other emerging markets and the safe havens of the West. An astonishing $53 billion has exited Indian stock markets in the last 18 months. What looks like a success—strong markets—has enabled foreign portfolio investors (FPI) to exit at a high price.
