Currency volatility hurting industry: BCIC

The Bangalore Chamber of Industry and Commerce has expressed concern about the extreme volatility being displayed by the rupee which it said would exacerbate current inflationary trends and worsen the current account deficit

N Venkatakrishnan, chairman, Finance and Corporate Affairs Expert Committee, BCIC, said that rupee volatility will adversely impact industry struggling to come out of the slow growth phase.

“There is a prevailing belief that Foreign Institutional Investors (FIIs) are pulling money out of the country owing to the tapering off of US Quantitative Easing (QE). However, the comments of RBI and the government have only heightened the uncertainty rather than calming the economy,” Venkatakrishnan said. 

He pointed out that industry and the people have been looking to these institutions to bring in policies on time to end this uncertainty. “India’s economic story has been strong and what industry needs is only support in time through strong policy measures. A case in point is the delayed implementation of the policy to contain gold imports,” he said.

BCIC President H V Harish emphasised that while external factors, such as the proposed withdrawal of quantitative easing in the US, and the expected increase in interest rates, are contributing to pullbacks from US investors, India has a poor FDI record in comparison with China and other countries.