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`Hike in interest rate will hit Tirupur knitwear exporters'
Our Bureau
Coimbatore
April 4
Tirupur knitwear exporters said the surge in bank lending rates — following last week's RBI hikes on repo rates and cash reserve ratio (CRR) — will adversely impact exports, especially garment shipments.
The increased rate on borrowing would render exports uncompetitive as in most cases the garment exporters negotiate their export prices-based on the then prevailing production cost, the Tirupur Exporters Association (TEA) said in a communication.
Sustaining Exports
Most private banks have now pitched their prime lending rate (PLR) at 14-14.75 per cent and the public sector banks charge 12.25-12.5 per cent. At this rate it will be difficult to sustain their exports, he said.
The hike in the interest rate — coming at a time when the rupee is appreciating against the dollar — is hurting and the companies hitherto enjoying the sub-PLR rates too would attract the mark-up rates, the TEA communication said.
Seeking stability in interest rates, the association had also pleaded the RBI to monitor the banks and the financial institutions so that the exporters are spared from higher interest rate consequent to the repo rate revision.
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