Rupee world's fourth biggest gainer this year
The rupee rose over 8.5 per cent against the dollar and this trend is likely to continue, says global research firm Credit Sussie.business Updated: May 07, 2007 18:12 IST
The rupee has emerged as the world's fourth biggest gainer this year with a rise of over 8.5 per cent against the dollar and the trend could continue, global research firm Credit Suisse said on Monday.
Appreciation in the domestic currency would significantly hit exporters while sectors like engineering, construction and oil companies were expected to gain from the upswing in rupee against the dollar, Credit Suisse said in a report.
"The Indian currency has been the fourth most appreciating currency after Iceland's krona, Thai baht and Columbian peso, which rose between 8-11.5 per cent," Credit Suisse analyst Nilesh Jasani told media.
This strengthening was partly due to steps taken by the central bank to reduce inflationary pressures by making imports cheaper, he said. Foreign inflows have also been rising and there is an overall weakness in the dollar, he said.
"We expect the rupee to keep the gains if not appreciate by 1-2 per cent in the following months," the report said.
Another research firm, Citigroup in a note on Monday, put its 12-month forecast for Indian Rupee at Rs 40 per dollar.
The rupee on Monday opened sharply higher and crossed a nine-year-high to touch Rs 40.55 against the US currency on heavy dollar selling by exporters.
Software and service exporters are experiencing maximum loss as their net foreign earnings as a percentage of profits is among the highest, Credit Suisse said.
For example, TCS and Infosys, the country's largest and second-largest software exporters, have foreign exchange exposure of over 200 per cent on their profits and Wipro, the third-biggest, has over 179 per cent.
Pharma firms can also face pressures on their profits due to weak pricing power on exporting products.
First Published: May 07, 2007 17:49 IST