The impact of exchange rate fluctuations on the economic growth of India
Dr. VB Khandare
In the globalization period exchange rate is the crucial factor affecting on economic growth of every country. This study is undertaken to examine the impact of exchange rate on economic growth of India during 1987 to 2014. According to standard deviation it is observed that the GDP growth is more consistent than exchange rate, interest rate and inflation rate during the study period in India. The coefficient of correlation 0.230 indicates that the correlation between exchange rate and GDP growth is positive but not significant. But the interest rate and inflation rate have inverse effect on economic growth of India during the study period. It is observed form the study that the exchange rate and interest rate has negative but not significant impact on economic growth of India (Showing β = -0.087 and t = -1.389 and β = - 0.707, t = - 2.327 respectively) during the study period. But it is found that the inflation rate has positive but not significant impact on economic growth of India with (β = 0.029, t = 0.2012). Correlation analysis shows positive but multiple regression analysis shows negative relationship between exchange rate and GDP growth in India during the study period.