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Our Bureau

Chennai , July 25

THE Confederation of Indian Industry (CII) plans to initiate discussions with the Centre and the Reserve Bank of India to address the concern of the appreciating value of the rupee while competing countries are intervening to prevent their currencies from appreciating, according to Mr Anand Mahindra, President, CII.

Addressing reporters here today after the meeting of the CII's national council, he said the increase in the value of the rupee was among the various issues addressed at the council meeting. Though this renders imports cheaper, there was cause for concern. If the movement was in tandem with similar appreciation by currencies of other countries particularly those of Indian industries' competitors, it would be good news. However, it is apparent that the countries in the South East, including China were not planning to let their currencies appreciate.

China has taken a decision to not let the yuan float at least for next 18 months, he said. This way export revenues drop and the industry is concerned. The Government should intervene to ensure that the rupee does not appreciate further. The CII plans to initiate discussions with the RBI to better understand its strategies, and for its part would advise sterilisation through the repo route.

Though it was early days yet, the industry would focus on sensitising the Government to this issue. Further appreciation would mean that even increases in productivity would not help to offset the effect of appreciating rupee value, Mr Mahindra said.

However, on most other fronts the industry has cause for optimism. There has been good news on the infrastructure front including power and roads, particularly the progress in the Golden Quadrilateral. However, the slow developments in the airports and seaport were a cause for concern, he said.

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