Rupee fall brings cheers to exporters

Written by Agencies | New Delhi, August 27: | Updated: Aug 27 2008, 18:52pm hrs
Higher margins resulting from a depreciating rupee have brought cheers to exporters who hope that the domestic currency remains steady at the level of 42-43 to a dollar.

The domestic currency, which quoted at 43.75 a dollar in early morning trade on Wednesday, had hit a more than a 17-month low of Rs 44.10 against the greenback during intra-day on Tuesday in the inter-bank foreign exchange market.

"The trend is certainly good for exporters who at the present level are in a competitive position," President of the Federation of Indian Export Organisations (FIEO) Ganesh K Gupta said.

He agreed it was a win-win situation for exporters. "If the current exchange rate continues, we will certainly grow by 35 per cent and the total exports would exceed the target of 200 billion dollars."

However, Gems and Jewellery Export Promotion Council (GJEPC) Chairman Sanjay Kothari said he would prefer a stable rupee-dollar rate. "We would rather have the rupee steady at 42-43 as it would give us a clear picture when we make our forward contracts," he said.

With reversal of trend in exchange rate, India's exports have grown by 22.3 per cent in the first quarter of this fiscal at 42.84 billion dollars.

The country saw exports growing by 23 per cent to 155.5 billion dollars in 2007-08 despite the rupee appreciating by over 13 per cent during the fiscal. The trend started changing before beginning of the new fiscal.

S P Agarwal of the Indian Institute of Foreign Trade said the rupee fall would lead to costlier imports, forcing the domestic industry to increase indigenous technology and content for value-added exports.