The runaway rise in the rupees value continued for the fifth straight session with the Indian currency gaining another 32 paise at 46.34/35 against the US currency as the dollar was battered in foreign markets again and corporates and exporters continued to sell the greenback. Speculation that the Reserve Bank of India might signal interest rate hike amidst capital inflows and rising food inflation added to the rupees rise. On the other hand,as exporters started complaining about adverse effects of rising value of the rupee against the dollar,the government said appreciating Indian currency reflects the strength of the economy and it cannot do much so long as the rupee rises and falls in a range. Indias exports fell an annual 19.4 per cent in August to $14.29 billion,their 11th straight monthly fall. The rupee has now gained around 2.46 per cent from 47.51 on October 6. The rupee is now up by over 11.2 per cent from a low of 52.2 in March 2009. When the rupee appreciates,exporters earnings will come down as they get lesser amount on conversion from the dollar. However,importers and travellers stand to gain as they need to shell out less rupees to buy the US dollar. As long as the movement is not volatile and takes place based on fundamentals within a sort of range and moves two ways,there is not much that one can do about it, finance secretary Ashok Chawla told reporters in Delhi when asked whether the government or the RBI would intervene to rein in rupee value. Shares of IT companies like TCS (down 3.4 per cent) and Infosys Technologies (down 1.8 per cent),which get more than half their revenue from North America,extended losses as the rupee climbed to its highest in more than year. The dollar was down 0.7 per cent against most major currencies,almost back to its year low against major currency indices. Against sterling,it was $1.60. The high-flying Australian dollar continued its run to a high of 90.3 US cents after Australia became the first country in the OECD to raise interest rates earlier this week and its unemployment rate dropped unexpectedly to 5.7 per cent. With agencies Rupees rise is a big worry: Exporters MUMBAI: The appreciating rupee will have a 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 the Council for Leather Exports Habib Hussain said. In fact,many exporters have been mulling covering for the risks associated with rise in value of rupee. They will start hedging,which means entering into transactions at a specified price of the rupee against the dollar.
