*Professor, Department of Management Studies, University of Madras, Chennai, India
**Ph.D Research Scholar, Department of Management Studies, University of Madras, Chennai, India
Online published on 4 February, 2015.
Oil is one of the most basic commodities upto now since the industrial revolutions which lead to the era of establishment of oil refineries throughout the world. The price randomness of oil as time varying effect is examined with the exchange rate of India from Q1-2004 to Q4-2013 in this study. From the Cointegration test it's found that there exists a long run relationship between oil price and exchange rate of India thus the Indian policy makers should efficiently take measures to reduce the crude oil price shock from exchange management indirectly so to hold the currency value strong against the increasing crude oil import bill.
Crude Oil Price, Exchange Rate, Augmented Dickey Fuller test, Johansson Cointegration
