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Dynamics of the Exchange Rate in India

Abstract

Rabia Najaf and Khakan Najaf

Exchange rate is act as the main role in the integral part of the economic development. India is also facing this issue like other Asian countries impact of increase exchange rate on the growth of the economy. It is source of the external funds and act as the channel between risk and investment. In this research, we have taken the data from 1998 to 2008 and applied the ADF test, normality test and Jarqu e-Bera statistics test for taking the proper results about the impact of exchange rate on the development of India. Normality test explains the nature of the data. Our results are showing that increase exchange rate has negative impact on the stock exchange of India. Our suggested that Government should focus about the exchange rate policy.