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National Association of Software and Services Companies (Nasscom) has said it is volatility not depreciation that causes a concern.
“More than depreciation, the volatility of currency movement is a concern that needs to be tackled since it hinders the planning process for the Indian IT-BPO industry,” Nasscom said in a statement on Friday.
A 10 per cent plus movement of currency in a few weeks is definitely worrying the companies. While there is a marginal impact on the bottom-line when the rupee depreciates, it is reversed when the currency movement is the other way.
“Moreover, hedging as well as contracts that increasingly take into account the foreign exchange rates make an assumption of a direct correlation between currency movements and margins a bit misleading,” he said.
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