HYDERABAD: The steep fall in rupee’s value, which crossed Rs 56 to a dollar on Wednesday, has hit businesses, particularly those that depend on imports, hard in Hyderabad. The reason is simply the fact that they have to cough up more to buy in international market. Several traders have incurred losses running into lakhs of rupees in the past one week. The calculations of some of them turned upside down in a matter of hours.“We need stability in dollar rates in order to plan our operations. With such heavy fluctuations, I am not able to quote my order as the value of rupee is changing so frequently,” complains K Gopalakrishna, GM (finance) at Bhagiradha Chemicals & Industries Ltd. Narrating his personal experience, he says, “I had placed some orders earlier when the value of the rupee was around 53. The value went down to 55 by the time I received my goods. The daily fluctuation is costing me in lakhs. I incurred a loss of Rs 10 lakhs within a span of 3 hours.”He also points out that even exporters will not be immune. “The fall in rupee leads to increase in the cost of production for exporters. I cannot pass on my losses to my customers. This in turn negatively affects my cash flow, profit realisation and financial position,” he explains.However, Venumadhav, GM, AP Trade Promotion Corporation, believes exporters will benefit a bit. “The fall in the value of rupee is a gain for exporters. But it is not good for the economy. The government, the RBI, and the finance ministry have to take steps to see that rupee does not fall further. Ultimately, all losses will have to be borne by the common man,” he says.Echoing his views, MV Rajeshwara Rao, Secretary General, FAPCCI, adds, “exporters might gain a little but imports are much higher in our country when compared to exports.” He puts the issue in perspective, pointing at the fact that international markets are no longer very attractive for our exporters and the difference between exports and imports is too big. “Hyderabad pharma industry might gain for its exports but overall, it’s a disappointing situation,” he opines.He warns that appreciation of dollar will adversely affect fiscal consolidation and also lead to an increase in the current account balance. “An increase in fuel price would affect all sectors of the economy and the common man,” he explains. And that is exactly what is happening with the abnormally high petrol price hike. There are a few though who are hedging their bets so to speak. “These fluctuations are quite expected if we consider the global factors including political and financial crisis across the world. As brokers, we offer hedging facility to our clients to offset potential losses that may be incurred. Also RBI is expected to take all possible measures to overcome this situation. Further fall of rupee would be really bad for the economy,” says Sai Sagar, asst manager-business development at Alpari Financial services (India) pvt ltd. The increased cost of imports could be guaged from the fact that one dollar was equal to Rs 18.11 in 1990 and now, it is 56.22. It was hovering around 50 a few months back.
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