Friday, September 28, 2007

Strong rupee:Boon or Debacle?

There may be a n-number of reasons for the appreciating rupee,but they are well known and have been discussed by economists and analysts extensively.But what may be the impact on Exports?Exchange rate is only one of the variables influencing the export performance of a country,others might be manufacturing cost,quality of products, delivery schedules and brand.Some of the big software companies started to negotiate with its foreign clients for compensation.But in textile sector,many of the Knitwear manufacturing companies discussing to shift to deal in euros instead of dollars.A rising rupee is also expected to attract more foreign direct investment to India apart from keeping inflation and interest rates down,but in any way it may not help for outsourcing organizations. This should help the manufacturing sector to maintain the tempo of new investments and productivity improvements.

1 comment:

Edith said...

Good post.