Rupee volatility in India leads to higher appreciation impact on economy.
Rupee volatility in India from 1997-2013 was analyzed to see how it affects the country's economy. The study found that exchange rate volatility is not just a local issue. Depreciation of the rupee mainly impacts inflation and trade balance negatively, while other factors are positively affected. This means that when the rupee appreciates, it has a bigger impact on the economy than when it depreciates.