Impact of exchange rate on Industry Assignment

Impact of exchange rate on Industry Assignment Words: 261

We began with a universe of 7,691 listed companies to be used in this study. The sample contains 1590 listed companies (from this universe) that are characterized by force expenditure of greater than RSI 10 core (US $ 2 MN). The sample is representative of trends discussed here as force earnings by these 1 590 companies accounts for 97% of total force earnings by all 7,691 companies. Total force earnings of these 1 590 companies account for around 60% of Indian’s exports of goods and services in FYI 1 . These companies have further been classified onto 19 broad industry groups.

We use net foreign exchange earnings of these companies as a proxy for their force exposure. Based on trends observed in FYI 1, we rank industries on their expected force risk, in the absence of hedging. Results Of the 19 industries, 4 have been net gainers in force earnings, the highest being recorded 6 sub-industries in the chemical industry and 1 sub-industry in non-metallic mineral industry have been identified study: Industry Impact AT Rupee Depreciation by IT, followed by textiles, two wheelers and commercial vehicles.

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The remaining industries eave registered net force earnings outgo, the highest in chemical industries and lowest in passenger vehicles. Higher raw material import cost has been the prime contributing factor to this trend. These vulnerabilities remain in the absence of unhinged positions. Force Earnings With a depreciating rupee, the value of exports would naturally increase. Hence export-oriented industries would post gains in force earnings. Of the 19 industries under consideration, export earnings contribute more than 99% to force earnings in 8 industries. Table 1 lists the top 10 force earning industries.

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Impact of exchange rate on Industry Assignment. (2020, Mar 05). Retrieved April 9, 2020, from