The declining rupee has finally brought some relief for the exporters. Even if temporary, the gains they make from any decline of the rupee value against the dollar would help them offset some of the heavy losses they suffered over the last one year due to the 12% appreciation in the domestic currency.
The depreciating rupee has even encouraged many exporters to go for ?forward bookings? of their orders for at least 2-3 months to realise some gains from the downward movement of the currency. This is because, after a long time, exporters are now in a position to obtain forward bookings at 40-plus fixed rates on the rupee against the dollar value.
Reserve Bank of India on Tuesday said its reference rate for the dollar was Rs 39.73. This means, the value of the rupee against the dollar has declined from Monday?s 39.38 and 39.27 on January 18. However, since the US Fed cut its interest rates by 75 basis points, the depreciation of the rupee could be short-lived.
?This honeymoon period of rupee decline will not last long. So, many of us are going for forward bookings. My company has made forward bookings worth $1.5 million for shipments till March-April at 40-plus rates for rupee,? said Rakesh Shah, chairman, Engineering Export Promotion Council.
But D K Nair, secretary general, Confederation of Indian Textile Industry, said though textile exports was one of the worst hit sectors due to rupee appreciation, ?macro-economic situation indicates that rupee will stay strong.?
?So some exporters may have withdrawn from their foreign currency account to realise at least this small gain. They may also ask their buyers to make their payments sooner to get better value in this short period of rupee decline,? he said.
However, importers, (who are gaining from rupee appreciation), and export sectors with high import content (which lost only marginally due to rupee appreciation) are watching the situation. They are planning to hedge only a small portion of their orders.
Exporters, including those from the small and medium sector and cottage industry who have not hedged their risk, are benefiting by default from the declining rupee. However, exporters said they would press the government for further sops as the short-term decline in the domestic currency would not help them wipe out all their losses.