The Sensex 30 is a benchmark index for India's largest companies, indicating the health of the stock market. Its movements are influenced by domestic economic conditions, corporate performance, and global trends. The INR/USD exchange rate, which represents the Indian rupee vs. the US dollar, is crucial for India's international trade and investment. A depreciating rupee benefits export-oriented companies but increases import costs, affecting market performance. Understanding this dynamic is essential for investors and policymakers. The fluctuating link between the INR/USD currency pair and SENSEX 30 stock index is examined in this study from 2014 to 2024, with an emphasis on how changes in the exchange rate affect stock market performance. As India continues to integrate into the global economy, the interaction between foreign investments and the Indian stock market has become increasingly relevant for understanding investor sentiment and economic stability. This study particularly examines how returns from the SENSEX 30, an index that monitors 30 of India's biggest and most traded firms, are impacted by changes in the INR/USD exchange rate. The research's main finding is that there is a strong positive correlation between the INR/USD exchange rate and the SENSEX 30 index, with a rise of 1 in the SENSEX 30 for every 0.90 increase in the exchange rate. This implies that the depreciation of the Indian currency (INR) in relation to the US Dollar (USD) may result in increased stock market returns, especially in industries that rely heavily on exports, as Indian goods become more competitive in international markets due to the weaker currency. On the other hand, persistent depreciation may also result in higher import prices and inflationary pressures, which might be detrimental to business profitability and the state of the economy as a whole. Given that currency changes may have an impact on their investment decisions, foreign institutional investors (FIIs) are essential to this dynamic.. Decreased international gains are eroded by a lower INR, which frequently leads to portfolio modifications and more market volatility. Exchange rate fluctuations and stock market performance are influenced by the participation of foreign institutional investors (FIIs) and the Reserve Bank of India's (RBI) monetary policy choices. For example, the RBI's changes to interest rates have an effect on investor mood and influence market movements. Global economic variables that affect the US stock market and exchange rate include geopolitical tensions, changes in the price of commodities, particularly oil, and US Federal Reserve policies. The study uses a variety of statistical techniques, including as trend analysis, a t-test, and correlation analysis, to assess the link between the performance of the SENSEX 30 and the INR/USD exchange rate during a ten-year period. The results of the t-test demonstrate that the difference between the mean values of the SENSEX 30 and the INR/USD exchange rate is statistically significant, with a t-statistic of 30.278 and very tiny p-values. The SENSEX 30 exhibits a significantly bigger variation than the INR/USD, suggesting that the stock market is more volatile than the currency rate. This result is in line with predictions because stock markets are often more erratic than exchange rates. As a result, the study emphasizes how much exchange rate fluctuations affect the Indian stock market. It is recommended that investors keep a careful eye on currency changes since they have the International Journal of Scientific Research in Engineering and Management (IJSREM) Volume: 08 Issue: 09 | Sept - 2024 SJIF Rating: 8.448 ISSN: 2582-3930 © 2024, IJSREM | www.ijsrem.com DOI: 10.55041/IJSREM37610 | Page 2 potential to impact business profitability and stock market performance, particularly in industries that depend on imports or exports. The results also emphasize how crucial it is to diversify portfolios and hedge against risk related to currencies in order to successfully manage the intricate relationships between monetary policy, market volatility, and global economic situations.