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Rupee fall against dollar distresses Tirupur exporters

The rupee’s recent plunge against the US dollar has put Tirupur garment exporters in anguish. They had booked many orders around the 66.50 levels in the last few months. According to the President of the Tirupur Exporters’ Association (TEA), they would benefit only if the rupee’s depreciation were sustained. The Association represents the $3-billion industry in Tirupur.

On November 9, the rupee closed at 66.50. In the last three months, the rupee’s range against the dollar was a narrow 66.50/67. Thus export orders would have been booked and the resultant dollar inflows would have been covered in the forward foreign exchange market on a base rate of around 66.70 to the dollar.

But, when the base rate itself moved by Rs 2 to the dollar with the rupee falling to the 68.50 levels by end November, exporters were understandably upset at the loss of the opportunity to realise an additional Rs 2 per US dollar. A move of Rs 2 on a base of Rs 66.50 is nearly 3 per cent. The rupee has since clawed back some of its losses. Nevertheless the problem of missed opportunities would keep recurring for exporters.

 
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