The article explores how macroeconomic factors like current account balance, capital account balance, foreign investment inflow, and government debt impact the foreign exchange rate in India. By analyzing data from 2001 to 2010, the researchers found that these factors play a significant role in determining the value of the Indian Rupee against the US Dollar. In a flexible exchange rate system, changes in these indicators can cause fluctuations in the exchange rate, affecting the country's economy.