Impact Of Fluctuations In United States Dollar On Indian Rupee Since 1990 91 An Empirical Analysis With Particular Reference To Import Export Behaviour

Abstract

newlineThe major reason behind to chose the study is to see the impact of fluctuations in United States Dollar on Indian Rupee because Indian currency is more volatile in nature and gets affected by fluctuations in United States Dollar. Study will see the fluctuation in Indian Rupee against the United States Dollar from 1990-1991 .It is an empirical study with Particular Reference to Import Export Behaviour. Time period of the study is liberalization period 1990-91 as the Indian economy was closed economy before the 1990-91. (Srrejesh, S and KG 2011), (Aggarwal 2018). Open trade opens the way for India to come in spotlight as the major strong player in the International market. In an open economy exchange rate becomes a matter of huge concern. (Rangarajan , Prasad 2008). newline India is selected for the study as in 1991 the value of Indian Rupee was against 22.3 Rupee against the United states Dollar now the exchange rate of India for United States Dollar is 64.4 in 2017. There is great fluctuation in Indian Rupee against the United States Dollar. In 1991, export of consumer goods in India was 7,245 United States Dollar Million and import of consumer goods in India was 3,020 United States Dollar Million. But in 2017 export of consumer goods in India was 1, 17,502 United States Dollar Million and import of consumer goods in India was 39,891 United States Dollar Million (Reserve Bank of India Report). So, huge fluctuation in Indian export and import can be seen from the time period of 1991 to 2017. On the other side United States is one of the major trading partners of India. Thus, a slightly change in any direction in United States economy is directly going to affect Indian Rupee. newlineThere are various factors responsible for fluctuation in Indian exchange rate. Export and imports are responsible for creating differences among macroeconomic variables as Interest Rates, Balance of Payment, Gross National Income, Gross Domestic Product, Fiscal Deficit, Inflation, Current Account Balance, External Debt, Foreign Direc