📌 Why is the Rupee Depreciating? 💡 Mnemonic: "DEPRECIATION" → Each Letter Represents a Key Factor ⏲️Internal Factors: ✅ D → Deficit (Fiscal & Trade) – Persistent imbalances weaken the rupee. ✅ E → Expensive Imports – High crude oil & essential imports increase forex demand. ✅ P → Policy Uncertainty – Inconsistent RBI policies cause instability. ✅ R → Rising Inflation – Reduces the real value of the rupee. ✅ E → Export Struggles – Higher production costs make exports less competitive. ⏲️ External Factors: ✅ C → Capital Outflows – Foreign investors withdraw due to global uncertainty. ✅ I → Interest Rate Hikes (US Fed) – Strengthens the dollar, weakening the rupee. ✅ A → Ailing Global Economy – Reduced demand affects exports. ✅ T → Tensions (Geopolitical) – Conflicts increase energy prices, worsening trade deficits. ✅ I → Investor Sentiment Weakening – Risk aversion triggers capital flight. ✅ O → Oil Price Surge – High crude prices expand the trade deficit. ✅ N → Negative Growth Shocks – Global recessions slow capital inflows into India.