RUPEE/DOLLAR FLUCTUATION AND ITS EFFECT ON ECONOMY AND VARIOUS SECTORS
The stock market is an integral part of the economy and doesn’t function in isolation. It is the barometer of a nation’s economic growth and reflects various key Factors such as interest rates, GDP rates, trade policy, and currency movements. Out of these the strengthening and weakening of the Indian rupee have a major influence in the sectors of the economy. Data reveals that over the past decade, the Sensex/Nifty50 and the Rupee-Dollar exchange rate movement have shown a strong correlation. That too a positive one. This is also the case with various sectoral indices at both NSE and BSE. It is said that 44% of the ups and downs in Sensex have been in tandem with the movements of the Indian Rupees. %What factors affect Indian rupee? Some of the factors that impact the Indian stock market are the same as those that impact the Indian currency. These are the overall global economy and geopolitical developments. Along with it, trade deficit/surplus, monetary policies, forex reserves