SME Times News Bureau | 30 Mar, 2010
The fluctuation in the exchange rate has led to demand for a stable dollar for exports, said A. Sakthivel, FIEO Chief.
The stability on exchange rate front will add to competitiveness of exports as shown by China and Bangladesh which pegged their currencies to impart competitiveness to their exports.
Elaborating on the scheme, President FIEO said that the Government can also contemplate to provide a fix rate of exchangefor exports on optional basis.
An exporter opting for a fixed rate for a year may be credited at Rs. 47.50to a USD irrespective of the market value of USD. The scheme may be operational for one year from 1.4.2010 to 31.3.2011 and exporters opting for this scheme should give an irrevocable option to remain under it for a period of one year.
Such a stable exchange rate, said President FIEO, will add to the competitiveness of the Indian exports which has partially diminished due to appreciation of our currency by about 8% in last one year.
Sakthivel said that we have observed that movement of Rupee is inversely proportionate to the FII investments. More FII money is brought into the country,more Rupee strengthen. FIIs are making short term profits and pulling out the money leading to such sharp exchange rate movements.
To avoid such fluctuations, there is a need to regulate the FII investment so that it stays in India for a minimum period of two years.
