Exports will miss this fiscal’s $325-billion target: Sharma
26 March 2014 1:03 AM GMT
‘We (will) fall short but we will do better. Definitely much better than last year and we will be bring down the trade account deficit substantially,’ said Sharma. For the April-February period, the country’s merchandise exports were up 4.79 per cent to $282.7 billion. Imports during the 11-month period fell 8.65 per cent to $410.86 billion. The trade deficit during this period was $128 billion.
In 2012-13, exports declined by 1.8 per cent to $300.4 due to the global demand slowdown. Federation of Indian Exports Organisation (FIEO) President Rafeeq Ahmed has said that the exports during the current financial year will touch about $312-315 billion. Exporters said that besides the global slowdown, domestic factors like declining manufacturing growth too have impacted the exports growth. The apex exporters body have suggested the government to fix exports target at least for next five years and announce some major policy decisions in the forthcoming Foreign Trade Policy for 2014-19 to boost shipments.
FIEO is working on a paper for the new policy which would include recommendations to increase exports. The manufacturing sector, which constitutes over 75 per cent of the index, declined by 1.6 per cent in December, against a contraction of 0.8 per cent in the year-ago period. On the currency swap agreement, Sharma said that an inter-ministerial committee is examining the matter. India is exploring possibilities of entering into currency swap agreements with trade partners to shore up exports and bring down trade deficit, which is putting pressure on the rupee.
India has signed currency swap agreements with Japan ($15 billion) and Bhutan ($100 million). China has shown active interest in entering into such an agreement with India but it is yet to be signed. Currency swaps have emerged as an important derivative tool after the global financial crisis of 2008 to hedge the exchange rate risks.
Sharma expressed hope that the Reserve Bank of India (RBI) would cut interest rates to boost growth, taking into account the declining rate of inflation, both wholesale and retail ‘We hope that they will factor this in,’ he replied when asked whether the RBI would reduce interest rates in view of softening inflation. The RBI’s next Monetary Policy Statement is scheduled on April 1. It hiked a key interest rate to 8 per cent from 7.75 per cent at its previous monetary policy review on January 28.
Rupee rises to near 7-month high of 60.48 per $
Mumbai: The rupee gained 29 paise on Tuesday to close at a seven-month high of 60.48 against the dollar on sustained selling of the US currency by exporters and banks. At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced strong at 60.60 a dollar from previous close of 60.77. Hefty capital inflows helped the rupee to bounce back to a high of 60.44 before settling at almost seven-month high of 60.48, a rise of 29 paise from its previous close. The last time the rupee closed at this level was on August 1, 2013 when it ended at at 60.43.
In three straight sessions of gains, the local currency has spurted by 86 paise. The dollar index was trading up by 0.12 per cent against a basket of six major global rivals. ‘Persistent dollar inflows into equity and debt markets are supporting the rupee. Monthly dollar demand is likely to put pressure on the rupee but the positive sentiment on account of relentless capital flows is seen restricting the losses,’ said India Forex Advisors Founder & CEO Abhishek Goenka. The rupee continued to rule firm to end at 99.77 against the pound from last close of 100.30. It strengthened to 83.51 per euro from 83.70. It improved to 59.14 per 100 Japanese yen from 59.33. The RBI fixed the reference rate for dollar at 60.4935 and for the euro at 83.6745.
In 2012-13, exports declined by 1.8 per cent to $300.4 due to the global demand slowdown. Federation of Indian Exports Organisation (FIEO) President Rafeeq Ahmed has said that the exports during the current financial year will touch about $312-315 billion. Exporters said that besides the global slowdown, domestic factors like declining manufacturing growth too have impacted the exports growth. The apex exporters body have suggested the government to fix exports target at least for next five years and announce some major policy decisions in the forthcoming Foreign Trade Policy for 2014-19 to boost shipments.
FIEO is working on a paper for the new policy which would include recommendations to increase exports. The manufacturing sector, which constitutes over 75 per cent of the index, declined by 1.6 per cent in December, against a contraction of 0.8 per cent in the year-ago period. On the currency swap agreement, Sharma said that an inter-ministerial committee is examining the matter. India is exploring possibilities of entering into currency swap agreements with trade partners to shore up exports and bring down trade deficit, which is putting pressure on the rupee.
India has signed currency swap agreements with Japan ($15 billion) and Bhutan ($100 million). China has shown active interest in entering into such an agreement with India but it is yet to be signed. Currency swaps have emerged as an important derivative tool after the global financial crisis of 2008 to hedge the exchange rate risks.
Sharma expressed hope that the Reserve Bank of India (RBI) would cut interest rates to boost growth, taking into account the declining rate of inflation, both wholesale and retail ‘We hope that they will factor this in,’ he replied when asked whether the RBI would reduce interest rates in view of softening inflation. The RBI’s next Monetary Policy Statement is scheduled on April 1. It hiked a key interest rate to 8 per cent from 7.75 per cent at its previous monetary policy review on January 28.
Rupee rises to near 7-month high of 60.48 per $
Mumbai: The rupee gained 29 paise on Tuesday to close at a seven-month high of 60.48 against the dollar on sustained selling of the US currency by exporters and banks. At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced strong at 60.60 a dollar from previous close of 60.77. Hefty capital inflows helped the rupee to bounce back to a high of 60.44 before settling at almost seven-month high of 60.48, a rise of 29 paise from its previous close. The last time the rupee closed at this level was on August 1, 2013 when it ended at at 60.43.
In three straight sessions of gains, the local currency has spurted by 86 paise. The dollar index was trading up by 0.12 per cent against a basket of six major global rivals. ‘Persistent dollar inflows into equity and debt markets are supporting the rupee. Monthly dollar demand is likely to put pressure on the rupee but the positive sentiment on account of relentless capital flows is seen restricting the losses,’ said India Forex Advisors Founder & CEO Abhishek Goenka. The rupee continued to rule firm to end at 99.77 against the pound from last close of 100.30. It strengthened to 83.51 per euro from 83.70. It improved to 59.14 per 100 Japanese yen from 59.33. The RBI fixed the reference rate for dollar at 60.4935 and for the euro at 83.6745.
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