Rising rupee to further wane global competitiveness - ASSOCHAM
09 Jul '07
4 min read
India witnessed 2nd highest appreciation in its currency of 8.35% between January and June 2007 after 9.28% of Brazil among emerging economies that are in direct competition with Indian exporters and find themselves better off due to sharp rise in rupee value, revealed ASSOCHAM Eco Pulse Study.
The fallout of rupee appreciation against dollar is expected to amount to deceleration of India's exports proceeds to US$ 145 billion against targeted figure of US$ 160 billion for 2007-08, concludes the Chamber.
The ASSOCHAM had undertaken a Study on `Currencies of Competing Countries' comprising China, Taiwan, Brazil, Indonesia, Malaysia, Hong Kong, Pakistan, Russia, Thailand, Bangladesh, Indonesia, South Korea and Singapore.
The appreciation of Rupee in the period January 2007 to June 2007 is one of the second highest in developing countries taken for the study.
The Indian rupee has appreciated by around 8.35%, Brazil by 9.28%, Thai by 7.56%, Russia by 2.08%, Malaysia by 1.98%, China by 1.82% whereas the appreciation in Singapore, Bangladesh, Indonesia, Pakistan and South Korea is less than 1% and quiet insignificant. On the other hand the currencies of Hong Kong and Taiwan are depreciating which is major concern as India competes with both these countries.
The appreciation and depreciation vis-a vis with dollar of all these competing countries is a determinant and key parameter to the growth of Indian exports says the AEP study. Even the RBI Annual Policy 2007-08 doesn't address the problem faced by the exporters.
Releasing the Eco Pulse, the ASSOCHAM President Mr. Venugopal N Dhoot forecast that modest rupee appreciation would contain export growth and If corrective measures are still missing, the rupee might fall below 40 against dollar in next few weeks.
marketing@alchempro.com
