Impact of Exchange Rate and Inflation on Foreign Direct Investment

Abstract

A Main objective of the studied is to find out the impact on FDI due to change in the exchange rate. And main focus is that how impact of inflation causes effect on exchange rate which further leads towards fluctuation in flow of FDI .FDI is dependent on multiple factors but Exchange rate is the most important factor. These days exchange rate is very volatile due to open excess of the businesses and investors in both the domestic and international financial market. This volatility in the exchange is very considerable for foreign investors. For Analysis purpose time series data is taken for independent variables Inflation and Exchange rate and dependent variable FDI. After collecting Data variables are tested through regression analysis, correlation analysis and NOVA test.