Exporters’ body Federation of Indian Export Organisations (FIEO) on Friday said the rupee depreciation was increasing the cost of imported capital goods, inputs and various services used by exporters paid in foreign currency, particularly the freight charges.
He further said though the domestic currency had depreciated by over 13 per cent this year, the trends in non-deliverable forward (NDF) market indicated that further fall was not ruled out particularly as short-term debt share in India’s external debt was increasing.
The rupee on Friday crashed below the 74-level against the US dollar for the first time. The domestic currency was quoted 55 paise lower at 74.13 against the dollar soon after the RBI announced its monetary policy.
“Buyers are asking for sizeable reduction in prices, on account of rupee depreciation, as depreciation of buyers’ currencies have also increased the landed price in their own country,” FIEO president Ganesh Kumar Gupta said in a release.
He further said the most vociferous were the buyers from the Middle East, Africa and certain parts of Asia demanding deep cut in prices, while such demands from buyers in the US and Europe is sparingly received. “This puts exporters in quandary, if he has hedged himself thus not benefiting from weak rupee yet forced to cut prices,” Gupta said.