Why is the Indian rupee falling against the US dollar?

Key Points

• 1The rupee's exchange rate against the dollar has breached the 85 mark.
• 2The exchange rate reflects the relative value of currencies based on demand.
• 3If India imports more from the US, demand for the dollar increases, weakening the rupee.
• 4Trade in services and investments also affect the exchange rate.
• 5High inflation in India compared to the US can weaken the rupee.
• 6Investors are pulling out money from India, reducing the demand for rupees.