Study on Variation in Rupee in Relation to Dollar: A Conceptual Analysis

The change in rupee is posing a unique set of challenges for the Indian economy. The impact would not be limited to macro economy alone but it will also affect down to the level of firms under various sections of economy. This is conceptual study based on Rupee Dollar relationship in terms of Rupee appreciation that is dollar depreciation and rupee depreciation that is dollar appreciation. It provides valuable insights into impact of changes in currency relations on various sectors of economy keeping in focus economy in general and Indian economy in particular. Pros and Cons of currency appreciation and depreciation are studied as boon and bane for the economic growth. It also provides suggestions or steps needed to control as well as to overcome ill-effects of excessive fluctuations between rupee and dollar keeping in view current trends. The change in rupee value is good for someone whereas it adversely affect to others. The year 2012 has begun with catastrophic affect for the rupee. It was Rupees 43.96 against a dollar in the July 2011 and now for $1 it is Rupees 63.16. Rupee hits all time low in On 28 Aug. 2013, the value of a Rupee had fallen at Rs. 68.85, so that one would need around 69 Indian Rupees to buy $1. This kind of decline will have the sweeping impact on the macro economy of the country, as we are heavily dependent on the import of oil, food items and other crucial raw materials.