The relationship between a pandemic and the concurrent economy is quite comparable to the relation observed among health and wealth in general. Since 25th March 2020, India has been under a nation-wide lockdown  . This work attempts to examine the effect of  COVID-19  on the foreign exchange rates and stock market performances of India using secondary data over a span of 48 days . The study explores whether the causal relationships  among the growth rate of confirmed cases ( GrowthC ), exchange rate (GEX) and SENSEX value (GSENSEX) are remaining the same across different pre and post-lockdown phases, attempting to capture any potential changes over time via the Vector Auto Regressive (VAR) models. A positive correlation is found between the growth rate of confirmed cases and the growth rate of exchange rate, and a negative correlation between the growth rate of confirmed cases and the growth rate of SENSEX value. A naive interpretation from this could be that with the rising growth rate of the number of confirmed cases, the economy took a toll, reflected by the Indian currency being depreciated while the stock exchange index suffered from a fall. However, on applying a VAR model, it is observed that an increase in the confirmed COVID-19 cases causes no significant change in the values of the exchange rate and SENSEX index. The result varies if the analysis is split across different time periods - before lockdown, first phase of lockdownand extension of lockdown. To compare the three periods, we had undertaken five rounds of analyses . Nuanced and sensible interpretations of the numeric results indicate significant variability across time in terms of the relation between the variables of interest. This detailed knowledge about the varying patterns of dependence could potentially help the policy makers and investors of India in order to develop their policies to cope up  the situation.
Since March 25, 2020, India had been under a nation-wide lockdown announced as a response to the spread of SARS-CoV-2 and COVID-19 and has resorted to a process of 'unlocking' the lockdown over the past couple of months . This work attempts to examine the effect of novel coronavirus 2019 ( COVID-19 ) and its resulting disease, the COVID-19, on the foreign exchange rates and stock market performances of India using secondary data over a span of 112 days spanning between March 11 and June 30, 2020. The study explores whether the causal relationships and directions among the growth rate of confirmed cases ( GROWTHC ), exchange rate (GEX) and SENSEX value (GSENSEX) are remaining the same across different pre and post-lockdown phases, attempting to capture any potential changes over time via the vector autoregressive (VAR) models. A positive correlation is found between the growth rate of confirmed cases and the growth rate of exchange rate, and a negative correlation between the growth rate of confirmed cases and the growth rate of SENSEX value. However, on applying a vector autoregressive (VAR) model, it is observed that an increase in the confirmed COVID-19 cases causes no significant change in the values of the exchange rate and SENSEX index. The result varies if the analysis is split across different time periods - before lockdown, the four phases of lockdown, and the first phase of unlock . Nuanced and sensible interpretations of the numeric results indicate significant variability across time in terms of the relation between the variables of interest. The detailed knowledge about the varying patterns of dependence could potentially help the policy makers and investors of India in order to develop their strategies to cope up with the situation.
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The relationship between a pandemic and the concurrent economy is quite comparable to the relation observed among health and wealth in general. Since 25th March
Since March 25,
R
has
had
A
announced as a response to the spread of SARS-CoV-2 and COVID-19 and has resorted to a process of 'unlocking' the lockdown over the past couple of months
A
novel coronavirus 2019 (
A
) and its resulting disease, the COVID-19,
R
48 days .
112 days spanning between March 11 and June 30, 2020.
A
and directions
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GrowthC
GROWTHC
R
Vector Auto Regressive
vector autoregressive
D
A naive interpretation from this could be that with the rising growth rate of the number of confirmed cases, the economy took a toll, reflected by the Indian currency being depreciated while the stock exchange index suffered from a fall.
R
VAR
vector autoregressive (VAR)
R
first phase of lockdownand extension of lockdown. To compare the three periods, we had undertaken five rounds of analyses
the four phases of lockdown, and the first phase of unlock
R
This
The
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policies
strategies
A
with