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Last updated: 17 Oct, 2018  

Rupee.9.Thmb.jpg Rupee slide not helping exports sector: Drip Capital CEO

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SME Times News Bureau | 17 Oct, 2018

The downhill slide of the Indian Rupee has hardly proved beneficial for the Indian export sector, said Pushkar Mukewar, Co-Founder and Co-CEO, Drip Capital.

"Common perception is that devaluation in currency means good times for exporters, because they end up selling more as their goods/services become cheaper in the international market. However, there are several factors at play that mean that exporters see the negligible positive impact of a falling Rupee," said Mukewar.

The factors include, he added, import dependencies, damping because of global supply chains, increased profit hedging, etc.

For example, there are trends that show that trade impacts the value of a currency, rather than the other way around. The Rupee depreciation rate in June this year was 5.19% while the export growth was 14.17%. However, when the Rupee further fell sharply to 6.56% the next month, the export growth in fact reduced to 9.37%, he elaborated.

"This is because we import materials like crude, rough diamonds, gold, and precious metals to manufacture our major export commodities. Factors such as this mean that Indian exporters might actually see only minimal impact of the Rupee's continued devaluation," said Mukewar.

 
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