Despite the rupee breaching the psychological mark of 45 against the dollar for the first time in almost two years, exporters said it is wrong to generalise that the depreciation of local currency is resulting in windfall profits to them.
Commenting on the fall of the rupee beyond 45 level against dollar for the first time since November 24, 2006, Ganesh Kumar Gupta, president, Federation of Indian Export Organisations (FIEO) said the volatility of the rupee is a cause of concern for the MSME export sector that is barely coming to terms with the substantial loss suffered in the derivatives market.
Gupta said that on an average, almost half of the total exporters in the country have booked their forwards in anticipation of the volatility to around Rs 41/42 to a dollar and therefore, the breaching of the 45 level will not benefit such exporters.
The rupee has depreciated 12.6% against the dollar so far this year, as against the more than 10% appreciation in 2007 and such fluctuations are making it difficult for the MSME export sector to quote their export contracts abroad. Such marked gyrations in the currency also do not augur well for emerging economies like India, Gupta said.
He added such fluctuation might add to profitability of some exporters but hardly add to competitiveness of exports unless someone can correctly forecast the trend for next 6 to 9 months.