Financial Daily from THE HINDU group of publications
Saturday, Dec 14, 2002
Money & Banking - Forex
Industry & Economy - Exports & Imports
Euro firm; but no cheer for most exporters
MUMBAI, Dec. 13
THE euro on Friday touched a high of 1.0225 against the dollar. Similar levels were last seen on July 21 when the euro was at 1.0210, after which it depreciated to as low as 0.96 in September.
From there the currency has staged a steady climb. On Friday, it touched an intra-day high of 1.0256 against the greenback. Market sources feel the euro's high can also offer a fillip to the Indian currency.
"The appreciation of the euro is certainly good news for exporters from India getting export receivables in the euro. But only 10 per cent of our exporters receive in this currency,'' said Mr Sharukh Wadia, Senior Vice-President, Head - Treasury, IndusInd Bank.
A majority of exporters, around 60-65 per cent, get export receivables in US dollar, another 10 per cent in the pound and the remaining in miscellaneous currencies.
In the last six months, the euro has gained 12-15 per cent against the dollar.
Indian importers making payments in euro stand to lose due to the currency's gain. However, only 5 per cent of the country's total imports were in euro, said Mr Wadia.
The euro was at its peak when it was introduced in January 1999 at 1.17 against the dollar. But in the years 1999-2001 it witnessed close to 20 per cent depreciation.
This adversely affected Indian exporters who had switched from other currencies to the euro and many pulled out of receiving payments in the euro, currency watchers recalled.
Asked whether the present appreciation in the euro would see more exporters getting export receivables in that currency, they replied in the negative.
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