FIEO seeking measures from RBI to check rupee appreciation

While commenting on the recent update from the Reserve Bank of India (RBI), A Sakthivel, president of the Federation of Indian Export Organisations (FIEO), revealed that there has been an increase in credit offtake in the recent past. However, he has sought more measures to be undertaken by RBI to tackle the unbridled rupee appreciation.

"Although RBI has made maintenance of collaterals by foreign institutional investors (FII's) mandatory in order to enable them to carry out transactions in the cash segment, this is not sufficient as rupee is strengthening against the currencies of the South-East Asian countries," said Mr Sakthivel.

The FIEO chief has asked RBI to consider undertaking adequate measures to stabilise rupee and shield the export sector from the adverse impact of sharp currency fluctuations.

"MSME export-oriented units have been most adversely affected due to rupee volatility as this trend has led to loss of margins as well as loss of competitiveness for most small-scale exporters. Therefore, there is a need for RBI to take a note of the rising concerns pertaining to currency fluctuations and resolve them," said Prem Chandra Jain, proprietor of JainTea Co., a small-sized tea trading company in Kolkata.

Mr Sakthivel has recommended RBI to fix the exchange rate for exports on an optional basis for a year and control the foreign institutional investments to make it stay in India for at least 2 years.

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