AN ANALYTICAL STUDY OF THE EXCHANGE RATE BEHAVIOUR OF INDIAN RUPEE WITH MAJOR FOREIGN CURRENCIES

Abstract

The exchange rate of the Indian Rupee (INR) against major global currencies is a key determinant of India's trade competitiveness, inflation, and investment climate. This study examines the behaviour of the INR against ten major foreign currencies — the US Dollar, Euro, British Pound, Japanese Yen, Chinese Yuan, Canadian Dollar, Australian Dollar, Swiss Franc, Singapore Dollar, and South African Rand — over the eleven-year period from 2016 to 2026. Using secondary data drawn from the Reserve Bank of India, the International Monetary Fund, and other central bank publications, the study applies descriptive statistics and time-trend regression analysis to each currency pair. The results show that the Rupee depreciated consistently against most currencies studied, with the US Dollar and Canadian Dollar exhibiting the strongest and most statistically significant upward trends (R² of 0.966 each), followed closely by the Swiss Franc, British Pound, Chinese Yuan, Singapore Dollar, and Euro. Only the South African Rand showed no significant time trend. The study concludes that the steady depreciation of the Rupee reflects the combined influence of inflation differentials, trade imbalances, and global economic conditions, and recommends that the Reserve Bank of India and other stakeholders continue to monitor exchange rate volatility and strengthen India's external trade position.