The rupee has crossed 96 per US dollar for the first time in two months. Here is what is driving the fall and what it means for ordinary Indians.

Why is it falling? Three forces are at work. Foreign investors have pulled a record Rs 3.05 lakh crore from Indian equities this year. US bond yields have hit 5.3 per cent, their highest since 2002, making dollar assets more attractive. And crude oil near $100 a barrel is widening India’s import bill.

What gets costlier? Anything imported. Fuel prices, electronics, and overseas travel and education become more expensive. A weaker rupee also feeds into domestic inflation.

Who benefits? Exporters earn more in rupee terms for every dollar of sales. IT services companies with dollar revenues also gain.

What happens next? Much depends on the US Federal Reserve’s October meeting and crude prices. The Reserve Bank of India has been defending the currency, but a sustained dollar rally could keep pressure on the rupee.