• Dr. Laxmi Sarkar

The money market and the forex market form the most volatile markets in the economy based on speculative transactions. Both the markets have uncertainty incorporated in its very method of functioning. The Stock Market through its various capital market instruments act as an interface between the borrowers and the investors by providing a suitable arrangement in the form of primary and secondary market. The stability and performance of the market in terms of share prices is often viewed as a measure of business confidence as it augments the corporates and the big businesses with funds. The Forex market deals with more liquid asset- currencies, and hence is more volatile compared to the stock market. Exchange rate is the forex market index the investors rely on. Based on their risk tolerance and assets preference the investors make their choice regarding investments in the respective markets. Besides the selective investment in these markets the topic of the possibility, nature and intensity of relationship between the two markets remains a subject of interest for the investors. The relationship between the two markets, that is, the share prices and exchange rates have implications for the economy as well which indeed makes it a topic of inspection. High share prices indicate an environment conducive of growth and thus attracts investment from abroad. The increased demand for the domestic currency due to increased FDI inflows is expected to increase the exchange rate/ appreciation of the currency. The paper aims at diving into getting a better understanding of the same. The study is conducted for the case of India to look at the impact of the share price on the exchange rate. The study has covered the time frame post the Bengal crash of 1982 to check if the major fluctuations had left its trails on the forex market as well.

The Impact of Stock Price on Exchange Rate: The Case of India

"The Impact of Stock Price on Exchange Rate: The Case of India", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.9, Issue 4, page no.d692-d702, April-2022, Available :http://www.jetir.org/papers/JETIR2204383.pdf

"The Impact of Stock Price on Exchange Rate: The Case of India", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.9, Issue 4, page no. ppd692-d702, April-2022, Available at : http://www.jetir.org/papers/JETIR2204383.pdf