Exporters are getting worried. The sharp rise in the rupee against the dollar is creating a big hole in their pockets. Federation of Indian Export Organisations president Rafeeque Ahmed has expressed concern over the rupee emerging stronger for the fourth straight day on Friday buoyed by inward remittances and pointed out that during this week alone it has gained 19 paise to the dollar.Ahmed warned that the situation has become more precarious as foreign funds taking advantage of the wide interest rate differentials between India and US/Europe have invested/pumped in a huge amount in the current month itself in the Indian bonds and equity market. The rupee has risen by three per cent so far in 2003, but is still undervalued by about two per cent on a trade-weighted basis against the currencies of its five major trading partners. “When the rupee value goes up against the dollar, the earnings of exporters fall. This is because after conversion into rupees, exporters will get less amount for a dollar,” said an exporter. In fact, China has a fixed dollar rate, making Indian exports more vulnerable to forex fluctuations. Ahmed therefore urged the Reserve Bank of India to intervene and bring about parity and stability to sustain export growth at exising levels. Meanwhile, on Friday, the rupee surrendered early gains against the dollar and ended flat 46.5450
