YOKOHAMA (JAPAN): India will not lose its export competitive due to the appreciation of the rupee vis-à-vis the dollar, as per Asian Development Bank’s Chief Economist Yasuyuki Sawada.
Citing India’s strong export performance till now, he said that rupee’s strengthening shouldn’t be seen in isolation since market environment is another determinant of exports.
“You are thinking (that) appreciation of rupee India will lose international competitiveness… we can’t really talk about only rupee appreciation in isolation. Overall, export performance of India so far seems to be quite positive. You shouldn’t be too much pessimistic about exchange rate,” Sawada said recently.
The rupee strengthened to 64.2 against the dollar and has been rising compared with other emerging economy currencies. The rupee has appreciated by over 5% against the US dollar since January.
What is more disconcerting is the fact that the rupee is gaining ground and eroding the exporters’ competitive edge when exports have picked up smartly in the last few months. India’s merchandise exports increased at the fastest pace in almost six years in March led by petroleum, textiles, engineering goods and, gems and jewellery and rose 27.5% in March to $29.2 billion.