INDIAN RUPEE-US DOLLAR FLUCTUATION AND ITS IMPACT ON INDIAN ECONOMY

Exchange rate plays a denominate role in a country’s international trade there by influencing the country’s balance of payment. It is highly volatile in nature and it is determined by the market forces of the economy. The fluctuation in the movement of exchange rate is affected by the several macro-economic variables. It has been predicted that rupee may slide to 70 to the dollar in a month. RBI declared Stern measures on 14th august in order to tackle the outflow of foreign currency which also includes control on Indian firms investing board and on outward remittances by resident Indians. Whether currency will be able to find its stable level or will continue to go down further is a mystery. Rupee has weakened which means we need to spend more rupees to get that dollar. It is observed that five variables Balance of Payment–Current account, Foreign exchange reserves and GDP at factor cost are the most significant var