Exporters feel the heat of rupee rise
While the appreciation in rupee may have brought cheers to those going on foreign holidays or buying imported items, it has been unfavourable for exporters who are now getting lesser rupees per dollar as the Indian unit touches multi-year high aga...
By PTI |
MUMBAI: While the appreciation in rupee may have brought cheers to those going on foreign holidays or buying imported items, it has been unfavourable for exporters who are now getting lesser rupees per dollar as the Indian unit touches multi-year high against the greenback.
Federation of Indian Export Organisations (FIEO) Chairman (Western Region) S K Saraf said the rise in rupee was unprecedented. Normally, currencies fluctuate, but in the case of rupee, it was moving in only one direction - upward, he added.
"The rise in rupee is playing havoc with our exporters. Asian economies like Vietnam, Thailand, Pakistan and Bangladesh would benefit at the cost of Indian exporters."
According to Saraf, the ideal rate for rupee\dollar is about Rs 45. "Anything above Rs 45 would be bad for exporters."
Saraf said he had met Reserve Bank Governor Y V Reddy recently to apprise him of the situation. However, the governor maintained that the Reserve Bank does not intervene in the forex market either way.
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He said industries like information technology, textiles, light engineering and fine chemicals would be among those which would be negatively impacted by the rise in the domestic currency.According to him, it was high time the RBI started selling dollars to boost the rupee, sitting as it is "on a pile of $200 billion (foreign reserves)."
He attributed the rupee appreciation to the weakness of dollar in the international market against other major currencies and heavy speculation.
According to Saraf, the normal practice followed by various governments was to keep their exchange rates stable. But here, the rupee has appreciated by 10 per cent against the US currency in one year, he said.
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Though currencies of all other Asian countries have also appreciated on account of the dollar's overall weakness, they have not risen as much as the Indian rupee, he pointed out.Meanwhile, the rupee hit a high of 41.62\63 vs dollar in today's trade in the inter-bank foreign exchange market against yesterday's close of 41.85\90 levels before eventually weakening to settle at around 41.97\98 per dollar.
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There was no intervention by the Reserve Bank today as well, according to foreign exchange dealers.Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
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