<h1>Falling rupee raises import costs, fuels inflation, and strains capital flows, squeezing households and MSMEs.</h1> Sharp rupee depreciation-breaching 90 per US dollar and losing 20-27% over five years-has raised import costs, contributed to inflation, and reduced real household purchasing power. A monthly trade deficit exceeding USD 40 billion and net foreign investor withdrawals of over USD 17 billion have widened external imbalances, while stagnant FDI and slower external borrowing reflect investor caution, cumulatively constraining capital availability and adversely affecting MSMEs and import dependent export sectors.