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Tuesday, Nov 04, 2003

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Exporters feel let down

Our Bureau

New Delhi , Nov. 3

EXPORTERS have held that the Credit and Monetary Policy review statement of the Reserve Bank of India Governor, Dr Y.V. Reddy, has done "nothing substantial" to address their problems, especially those arising from the appreciation of the rupee against the dollar.

The President of the Federation of Indian Export Organisations (FIEO), Mr Rafeeque Ahmed, said that the RBI had "lost an opportunity to send a positive signal to the exporting community", which had been "eagerly awaiting" the Governor's statement.

But no measure had been announced in this regard, except a few procedural changes in the Exchange Control Manual.

FIEO had sought specific measures to contain loss of export competitiveness in the wake of the rupee's sustained strengthening against the dollar.

These included the opening of a dollar lending window by RBI to Indian banks at Libor, which, in turn, would lend these funds to exporters at Libor plus 0.75 per cent as per the RBI rules.

This would have taken care of the paucity of dollar funds with banks for lending to exporters.

FIEO had demanded that the RBI issue directives to banks to first meet the forex requirements of exporters and only subsequently extend FCNR(B) loans to non-exporting corporates.

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