Over 10 per cent rise of rupee against the US dollar has become a “big worry” for exporters at a time when they saw arrest in sharp decline in the country’s exports amidst a hope of recovery.
The dollar is trading at 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 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.
Exports have been declining since October 2008 under the impact of recession in the world’s major economies. However,the contraction in exports,which dipped by 30 per cent in March and April,reduced to 19.4 per cent in August this year.
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.