Rupee Fall Spurs Faster Realisations

Frenzied buying of dollars by the State Bank on India (SBI) pounded the rupee last week and fanned fears of a free-fall but the country's exporters have started speedy realisation of their export proceeds as every dollar earned abroad melts into bigger gains at home and Indian products turn cheaper in global shopping malls.

A Reserve Bank of India (RBI) official said nearly 200 exports repatriated their realisations in the eastern zone alone ever since the rupee tumbled to an historic low of Rs 44.05-07 against the US dollar last week, triggered by the SBI which scooped up greenbacks to meet a sudden spike in demand from importers.

 

"If the downfall of rupee continues for another fortnight, export realisation in the country will be higher by around Rs 1,100 crore in May," he said.

Stirred out a dreary performance last year, the exporting community has found spring in its steps after recent fall in the rupee value gave them the much-needed ammunition to face east Asian exports. Cheaper Indian exporters are now gaining competitive edge against those from other Asian countries.

A city-based exporter said, "Our organisation (Federation of Indian Exporters Organisation) has been demanding a depreciation of rupee to provide us a level-playing field with our Asian countries who have depreciated their currencies sharply in the last three years. We still believe that the rupee is over-valued against dollar. An exchange price of Rs 45 for a $ is good for the exporters."

A section of exporters, who believe that the weakness will persist and the markets will continue to remain skittish over the next fortnight or so, are longing for more: They are going slow in bringing back their proceeds held abroad. The Reserve Bank of India is also aware of the fact and is keeping a close eye on the exporters who are delaying proceeds in collusion with foreign counterparts.