Stronger Indian Currency Effects Prices

Rice exporters have expressed concern over the adverse fallout in trade due to firming up of the Indian rupee against the US dollar and sought the government’s intervention to prevent damage.
The Indian rupee has appreciated by 9% against the dollar since August 2006 due to heavy inflow of the greenback into the country. “The government and RBI should stop being a mute spectator to the whole episode. It must take remedial steps at the earliest and help out the exports from this very grave and critical situation”, the All India Rice Exporters Association said in a statement.

The statement said any delay in correction will cause “bankruptcy to many small and medium industry in the days to come for which we will hold no body else except the government of India”. It said basmati contracts made in October-November 2006 were signed when the dollar was worth Rs 44.50-Rs 45 and with the present rate of Rs 42 for a dollar the exporters have already lost about 7% of the total value of their contract.