Rupee bears ground cloud export appeal- Report

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Rupee bears ground cloud export appeal- Report

Indian rupee maintains ground cloud export attractiveness- Analysts

Mumbai-

India faces the risk of losing its export advantage as the rupee remains stable amid rapid weakness in other trade-dependent Asian currencies, head of South Asia economic research at Standard Chartered Bank said on Friday.

The rupee has largely held the same level against the dollar in the past three weeks, while the Malaysian ringgit and the Philippine peso are trading near record lows due to continued weakness in the Chinese yuan.

A strong rupee hurts exporters in India because it reduces the value of their foreign earnings when converted into the local currency.

Traders pointed to the intervention of the Reserve Bank of India to prevent the rupee from tumbling above the key psychological level of 80 against the dollar over the past few weeks as the dollar rose to its highest in two decades.

“Currency is just one part of the export performance, and demand is playing a much bigger role, but increasingly (the rupee is not weakening as much as others) is putting us in a more disadvantaged position,” said Anuphuti Sahi of Standard Chartered.

Other analysts have expressed similar concerns.

Amit Babari, managing director of Mumbai-based consultancy CR Forex, said the “overvaluation of the rupee” compared to its peers could weaken the attractiveness of Indian exports.

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However, some participants pointed to the relative stability of the rupee as a positive.

“Investors don’t like getting into highly volatile currencies…a stable rupee would be better for importers and exporters,” said Dilip Parmar, research analyst at HDFC Securities.