Derermination of Exchange Rates and A Forecasting Model for Indian Rupee

概要

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Post liberalization, the volume of foreign trade in India has grown consistently during the decade. The fluctuations in the foreign exchange rates could make the export or imports relatively much cheaper as well as much costlier. In this paper an attempt has been made to determine the factors affecting the exchange rate. For the analysis, quantitative variables such as the G-sec bond interest rates, the wholesale price index rates, the export import statistics and some qualitative data such as the political factor, the currency convertibility are taken into account. A multiple regression analysis was carried out to see the importance level of each factor taken into considerations and to understand the cause and effect on exchange rates.