Rupee's downward drift brings cheers to exporters

Mumbai, June 10 (UNI) Week that got past has seen rupee's fall and exporter's cheers.

Exporters, largely from textile sector, who tasted bitter after incurring trade losses owing to rupee's surge, got a respite when the currency met a sharp fall-by more than 90 paise last week to close at 41.11/13 on Friday.

According to sources in Textile Industry, the sector has literarily faced a slow-down in Exports to USA and European union, thereby severely affceting production, capacity utilisation resulting in redundancy in employment.

Rupee appreciated between June 5, 2006 and June 5, 2007 by 12.89 per cent, tumbling Indo-US exports by 0.4 per cent and that to European Union by 12.61 per cent.

''Rupee's move is unpredictable and we have to see whether it sustains its present moderate levels. Though the current currency margins are not in par with the preffered limits for exporters, it gives a slight respite to the industry,'' said Niraj Bajaj, president of Indian Merchant's Chamber to UNI.

Local currency started off its downward drift from last Wednesday when it met a low of 40.66/67 on enormous capital inflows, witnessed in Forex market in the preceding days. It gave in to outflows and subsequent strenghtening of US dollar.

From its nine-year peak 40.28 met a week back, Rupee's current fall is also viewed as the outcome of a series of tightening measures mooted by reserve bank to lock rupee's gains.

The central bank is believed to have bought dollars in large margins through public sector banks but were seen selling dollar on Friday in order to stem the currencies gains.

Adding to the exporter's agony, Pakistan and Bangladesh, during the same period, experienced a depreciation of Currencies by 1.47 per cent and 0.55 per cent respectievely, while, Indonesian Rupiah appreciated by 5.75 per cent and Chinese Yuan by 5.01 per cent.

The fall in Sensex margins had also claimed a deep correlation with the forex rates, said Dealers.

''Rupee margins were in line with the bourses in the past few sessions. It lost more than 40 paise on Friday and nearly 80-90 paise for the whole week. Two important reasons for rupee's fall are the steep outflows and strenghtening of USD,'' said Canara Bank Chief Forex Dealer Indrajith Sen Gupta.

UNI