The Hindu Business Line : `8 per cent appreciation against dollar too high to make good' — Exporters take up rupee rise with Jaitley

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`8 per cent appreciation against dollar too high to make good' — Exporters take up rupee rise with Jaitley

Our Bureau

`We know the ground reality. The impact of the appreciating rupee would be felt in the coming months as exporters are now hesistant about getting into new contracts with the rupee gaining against the dollar'.

New Delhi , April 9

EXPORTERS want the Reserve Bank of India to curtail the appreciation of the rupee against the US dollar through appropriate market interventions.

Some of them even feel that the rupee must be allowed to fluctuate only in a narrow range.

The exporting community's appeal for the central bank's intervention comes even as the RBI Governor, Dr Y.V. Reddy, maintains that the foreign exchange market continues to witness "orderly conditions".

The appreciating rupee, exporters say, is particularly impacting the export margins of traditional items such as textiles, handicrafts, leather goods and plantation products.

"These items generally have very low import content and are highly employment-intensive. Exporters dealing with such items are facing the brunt of the appreciation," Mr Rafeeque Ahmed, President of the Federation of Indian Export Organisations (FIEO), told a news conference here on Thursday.

A delegation comprising Mr Rafeeque Ahmed and chairmen of some of the export promotion councils met the Commerce Minister, Mr Arun Jaitley, on Thursday and apprised him of their concerns about the appreciating rupee.

"The Commerce Minister was responsive and concerned about the competitiveness of Indian exports being lost. He has promised to take up this matter with the Finance Minister," the FIEO President said.

When asked to react on the recent remarks made by the Finance Minister, Mr Jaswant Singh, who had reportedly said that the exporters are overstating their case, Mr Ahmed said, "We know the ground reality."

The FIEO President claimed that the impact of the appreciation of rupee would be felt in the coming months as exporters were now hesitating to get into new contracts due to their apprehension over further strengthening of the rupee against the dollar.

"There was export growth in the past. But we are concerned about the present and its impact on the future. We have reached a stage where we have started to count each and every penny. No matter, whatever be our cost-cutting efforts or reduction of overheads, one cannot compete against 8 per cent appreciation levels", Mr Ahmed said.

The FIEO President also underscored the need for the Government to implement the Gold Card scheme, which was announced in January this year.

As an alternative to intervention, Mr Ahmed suggested that the RBI could open a dollar window from which banks may borrow dollars as and when approached by exporters.

"The Government and the RBI must see to it that every exporter is able to get dollar funding at international interest rates," he said.

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