Decline in rupee against US dollar to provide level playing field to exporters: Federation of Indian Export Organisations
The rupee has touched a lifetime low of 69.10 against the US dollar by plunging 49 paise in early trade today as rising crude oil prices deepened concerns about the country's current account deficit.
NEW DELHI: Collapse of Indian rupee to a lifetime low of 69.10 against the US dollar will not give an extra edge to domestic exporters, but provide a level playing field in global market, FIEO today said.
Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said the development will not provide any additional support to exporters as currencies of other emerging economies, including China, too are depreciating.
"It will provide a level playing field to our exporters. It will not provide a much needed support as India is not singled out," Sahai said.
India's exports grew 20.18 per cent to USD 28.86 billion in May -- the highest in six months, even though the trade deficit widened to a four month high of USD 14.62 billion.
During 2017-18, the exports grew by about 10 per cent to USD 303 billion.
The rupee has touched a lifetime low of 69.10 against the US dollar by plunging 49 paise in early trade today as rising crude oil prices deepened concerns about the country's current account deficit and inflation dynamics.
Consistent dollar demand from banks and importers, mainly oil refiners, following higher crude oil prices kept the rupee under pressure.
Global oil prices have climbed after the US asked its allies to end all imports of Iranian oil by November.
Concerns over supply disruptions in Libya and Canada also pushed prices higher.
Industry body PHDCCI said that the fall in rupee against dollar is short lived, which is primarily driven by rising crude oil prices, apprehensions of deepening trade war between the US and China, FPI outflows and heavy month-end demand for the USD from importers and banks.
"Going ahead, exports growth is needed to be strengthened with supportive export infrastructure in general and reducing transportation costs in particular to revive the sluggish export growth trajectory," it said in a statement.
Engineering Export Promotion Council (EEPC) said that there should be stability in rupee movements so that it is possible for exporters to price their contracts with some amount of certainty.
"Import intensity in engineering exports is increasing and hence the yo-yoing of the Rupee in a very short period creates pricing complications for engineering goods exporters," it added.