EXCHANGE RATE FLUCTUATIONS – MAJOR FACTOR AFFECTING THE ENTREPRENEURS IN INTERNATIONAL TRADE

Abstract

International trade has helped the entrepreneurs to explore their business globally. Globalisation has paved way for the countries to depend on each other for purchase of raw materials, technology, manpower, etc. While doing business with other countries the most important factor affecting the traders is the exchange rate of currencies. The researcher in this study has focused on the importance of exchange rate and the various theories proposed for exchange rate fluctuations. Appreciation and depreciation of currency value affect not only the business traders but also it’s an indicator stating the economic status of the country. The paper also concentrates on these areas. Exchange rate fluctuations have become threat for business entrepreneurs in doing business. On the other hand, in order to overcome this threat various hedging tools like forward contract, futures contract , options etc. are being used. The paper is prepared from the data collected from secondary sources.