Appreciation of the rupee against the dollar, new headache for government

New Delhi, Sep 20, 2007. - Despite today initialed rapid appreciation against the dollar three decades, the Government views with concern the rapid rise of the rupee, which represents a danger for exporters and threatening the trade balance.
The Indian currency today broke the symbolic barrier of 40 rupees per dollar and closed at 39.91, a figure that is used to cap a rise above 10 percent since September 2006.
Guided by the strength of the Indian economy, the currency appreciation against the dollar in the past two days lies in part in the decision of the Federal Reserve to cut a half point in interest rates.
This measure, according to several experts in the market, could lead to new capital inflows on the floor Indian, because investors prefer to invest in higher-yielding currencies, such as the rupee.
"The rupee shows we have grown. Is the market that pushes and more market trust in the judgments of the Indian central bank or the finance minister, "said the consultant a few days ago Mecklai Jamal told the newspaper" The Times of India ".
The strength of the Indian currency and a weak dollar have caused an appreciation of the rupee by more than 10 percent in the last six months, the biggest increase in three decades.
But not only grows the rupee against the dollar between January and May this year, the value of Indian currency increased by 8 percent against the pound, 6.9 against the euro and 11.2 percent from the yen, detectable, however, cause headaches for Indian exporters.
Despite the pride of some investors, a survey by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) showed that 80 percent of exporters complained the appreciation of the currency, leaving them in a situation "very competitive".
The Government announced in July an aid package of Rs 14,000 million to help mitigate its effects, but this has not served to reduce their "concern" about the state of exports and rising trade deficit.
"Exports are an engine of growth and we must ensure that growth is not affected," he said about the Minister of Commerce and Industry, Kamal Nath, who refused today to revise down export forecast for this year, fixed at 160,000 million dollars.
But a government source who requested anonymity ahead of last July and that the goal is not only fulfilled, but also the appreciation of the rupee threatens 275,000 jobs.
"With an exchange rate of 40 rupees per dollar, try to keep the export figure of last year. Our best bet would be around 140,000 million dollars, "he said.
In their mad dash against the dollar, the rupee also has the support of the Sensex of the Bombay Stock Exchange, surpassing Wednesday for the first time the 16,000 points with a high rise in one day (653 points).
Most Asian currencies have risen against the dollar these days, but the rupee appreciation has the highest recorded in recent years, behind only the Brazilian real.
"In the past, transaction costs and lack of good infrastructure, coupled with limited government support for exporters, have threatened their benefits," said ASSOCHAM President, Venugopal N. Dhoot, the Indian agency IANS.
Now, with the fields of jewelry, furs and textiles (whose exports fell by 25-40 percent in April and May) suffering the effects of a strong rupee, exporters appear to have a new problem.
While the export business experience, however there who takes advantage of the new situation: tour operators and consumers.
"More and more Indians traveling abroad. Prices of package tours abroad have fallen 10 percent, "he told" The Times of India "one of the leaders in the industry.
And waiting for the strong rupee reduce prices of imported products, consumers in the new middle class are prepared to fill their houses Japanese televisions, phones and computers European Americans.