Impact of Rupee- Dollar Fluctuations on Indian Economy: Challenges for Rbi & Indian Government

This paper explores the impact of Rupee – Dollar fluctuation on Indian economy. The circumstances which has been created for the economy due to depreciation of rupee against dollar reveals that there has been a strong and significant negative impact of this currency volatility on many sectors. After Lehman Brother Crisis (2008) again year 2013 reported consequently some toughest move for RBI & Indian govt to defend rupee against dollar. During the six month Indian rupee weakens many times and reached to a level of 61.045 for a dollar. Since May, 2013 the local currency lost around 15 percent to the US currency. Indian economy which already suffered from large fiscal and current account deficit adversely affected by relatively exchange rate pressure. To track it again on the way many hard decisions were taken by RBI and Indian govt. This paper presents different challenges due to these fluctuation and steps triggered by central bank and govt to create stability.