Exporters should hedge currency risks: DGFT
Exporters should hedge currency risks and cut transaction costs to remain competitive in the wake of rupee hardening against the dollar, Director General of Foreign Trade R S Gujral said on Friday.
By PTI |
KOLKATA: Exporters should hedge currency risks and cut transaction costs to remain competitive in the wake of rupee hardening against the dollar, Director General of Foreign Trade R S Gujral said on Friday.
Speaking at an interactive session organised by Engineering Export Promotion Council (EEPC) here, Gujral said a strong rupee has become a reality and exporters would have to accept that. "As a safeguard measure, exporters should hedge the risks," he said.
He said a strong rupee was good for the economy as imports would be cheaper. However, export realisation would fall due to appreciation of the rupee vis-a-vis the dollar. He also suggested exporters should explore other currencies like the Euro for denominating contracts. Gujral also asked exporters to cut down transaction costs to remain competitive.
EEPC estimates that at the current exchange rate between the rupee and the dollar, engineering exports in 2007-08 would remain flat at last year's level of $27 billion.
Exporters also raised the issue of non-payment of VAT refund by the West Bengal government. Gujral said he would take up the matter with the state government and the Centre.
Speaking at an interactive session organised by Engineering Export Promotion Council (EEPC) here, Gujral said a strong rupee has become a reality and exporters would have to accept that. "As a safeguard measure, exporters should hedge the risks," he said.
He said a strong rupee was good for the economy as imports would be cheaper. However, export realisation would fall due to appreciation of the rupee vis-a-vis the dollar. He also suggested exporters should explore other currencies like the Euro for denominating contracts. Gujral also asked exporters to cut down transaction costs to remain competitive.
EEPC estimates that at the current exchange rate between the rupee and the dollar, engineering exports in 2007-08 would remain flat at last year's level of $27 billion.
Exporters also raised the issue of non-payment of VAT refund by the West Bengal government. Gujral said he would take up the matter with the state government and the Centre.
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