JOIN USThe dollar is trading below Rs 47, weakening by over 10 per cent from Rs 52.17 in the first week of March 2009.
“The appreciating rupee will have negative effect on exporters, who are already facing a lack of orders,” Federation of Indian Export Organisations President A Sakthivel said.
He said weak dollar results in falling margins for exporters as their rupee realisations drop, which in turn affects their negotiating power with the global buyers.
“Appreciating rupee is a big worry ... we were getting help from strong dollar,” Chairman of Council for Leather Exports Habib Hussain said. Though dollar has seen a sharp decline against major currencies of the world, bulk of India’s trade is done through the US currency.
The government has announced several sops for exporters who contribute about 17 per cent to the country’s gross domestic product. The sops included interest subsidy of 2 per cent on bank finance.
RBI intervention sought
Exporters, hit by a demand slump in the global market, have sought Reserve Bank of India’s (RBI) intervention for dollar credit from banks at competitive rates.
Exporters in the small and medium sector are not getting dollar credit, and if made available, the same is much above the RBI’s fixed rate of 3 per cent plus benchmark global interest rate (LIBOR), FIEO President A Sakthivel said in a statement. Availability of dollar denominated credit is need of the hour for exports, Sakthivel said.