Value of Indian Rupee in the currency market and performance of company in India

Abstract

Countries use their local currency for the domestic transactions inside the economy but when any business crosses the borders of economy, it gets exposed to the international currency market where prices of all the currencies are volatile as per the market force and activities for different reasons. It impacts on the earning of the company which goes beyond the borders. Business transacts with each other, exchanging currencies with the help of international currency market. Where 88% transactions are done in single currency which is dollar, as they swap the currencies with the dollar each time while doing international transaction. As the prices of currencies are decided by the market force, they vary as per the demand. If demand of your local currency is less then price of it will also be less which makes economy export oriented. Whereas high demand and high price of the currency reduce the chances of export from the economy.

This study looks out the trend of the value of Indian rupee in the international currency market and tries to measure the impact of it on the performance of the company that is selected to find out the impact of price on the earning or revenue of the company. Rise or fall in the value of rupee puts the impact in the revenue collected by the company operating on international level. Volatility of the currency can be predicted with the help of regression analysis to improve revenue

Introduction: Current Global currency system is heading towards a multipolar currency system, this change puts impact on the demand and the prices of the currencies world-wide. Indian rupee is not exception for it. In this transformation period, price of Indian rupee is volatile in the currency market. It impacts on the revenue collection and profit of the Indian company. Study focuses on the change in the value of INR against the different majorly used currencies, that are United states dollar, Euro, Great Britain pound, Chinese Renminbi, and Japanese Yen, change in the price of INR in against these selected currencies in the currency market makes impact on the profit and revenue of the companies in the India which are dealing on international level. Study selected companies which are working on international platform since last ten years. Dealing with the countries which trade with the currency basket currencies. Considering the change in the price and change in the earning and profit are studied with the regression analysis method.