BackFM’s message: Get used to strong rupee
FM’s message: Get used to strong rupee
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New Delhi: Finance minister P. Chidambaram has ruled out any more sops for the exporters hit hard by the rising rupee, asking them to get used to the stronger currency as dollar inflows would continue to grow. The government had announced a Rs1,400 crore package in July to help out exporters.
“We have taken note of the short-term pain of exporters and we have given them a package but we hope they will quickly adjust to the new level of rupee," Chidambaram said.
Exporters are demanding more incentives to deal with rupee appreciation against the dollar, complaining that their realizations have gone down due to the rupee effect and the prices they are quoting for new orders are turning away customers. The rupee has appreciated about 9% since March. From the lows of over Rs45 in October-November last year, the rupee now is slightly above Rs40.
Commerce and industry minister Kamal Nath also supported the exporters on Tuesday stating that the government was thinking of a new package for exporters. “The appreciating rupee has impacted exports and we are seized of the matter," he said.
The finance minister, however, said there could not be a situation where the economy grows but rupee remains weak. Exporters should take this into account while booking new orders, he added.
“When they book the new orders, they should factor these things into account. You cannot say the economy should grow but the rupee should not become strong," he said.
Chidambaram said the rupee has become strong against the US currency because of dollar’s weakness.
“It is only vis-a-vis the dollar that the rupee has become strong," he said. “The rupee has not become very strong against other currencies."
Exporters said the rising rupee has made the export target of S160 billion (Rs6.4 trillion) for the current year difficult to achieve.
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