This Research analyzes the relationship between Nifty returns and Indian rupee-US Dollar Exchange Rates. Several statistical tests have been applied in order to study the behavior and dynamics of both the series. The paper also investigates the impact of both the time series on each other. The period for the study has been taken from December 2011 to August 2014 using daily closing indices.

This Research uses the regression analysis technique to analyze the impact of exchange rate fluctuations on the share prices of NSE. Using the Share prices of the MNCs as dependent variable and the exchange rate fluctuations as an independent variable the regression analysis is done to determine the impact of exchange rate fluctuations on share prices. About 2,800 companies, with a global market capitalization of about $18 trillion, are listed on the NSE. The results show that a relationship exists between the two variables exchange rates and share prices.

Key Words: Exchange rates, NSE ,