Dollar could fall to Rs 30: Standard Chartered
Gerard Lyons, chief economist and group head (global research), Standard Chartered, believes the rupee will maintain its unrelenting march and possibly climb to Rs 30 to a dollar in the next five years.india Updated: Dec 02, 2007 23:37 IST
This one would surely send a shudder down the spines of exporters. Gerard Lyons, chief economist and group head (global research), Standard Chartered, believes the rupee will maintain its unrelenting march and possibly climb to Rs 30 to a dollar in the next five years.
“The rupee could hit Rs 30 to a dollar in the next five years. India needs to raise about $500 billion for its infrastructure, a major chunk of which will come from overseas. India needs to think about the rupee, not just against the dollar, but more against a whole basket of currencies,” Lyons said at the India Economic Summit 2007, organised by the Confederation of Indian Industry (CII) and the World Economic Forum, here on Sunday.
The rupee has surged in value against the dollar by 15.1 per cent since October 2006.
“Appreciation of the rupee is definitely a sign of the growth of the economy. But if it is not tackled soon, it may give rise to inflation,” Lyons said.
Last week, Finance Minister P Chidambaram said the rupee’s rise had put pressure on export sectors, particularly those with low import intensity such as leather, textiles, handicrafts and marine products.
Rahul Bajaj, chairman, Bajaj Auto, said that it was imperative to address the issues of job losses and falling export earnings due to a strong rupee. “The main reason behind the appreciation is hot money, which needs to be tackled,” Bajaj said.
Stephen Roach, chief economist and chairman (Asia), Morgan Stanley, said the US economy was in the midst of a serious sub-prime crisis and it could have an impact on other economies across the world.