‘Rupee rise inevitable, but address concerns’


New Delhi : The appreciation of the rupee, which increased by about 15 percent in the past 12 months, is an inevitable sign of a growing economy but some of its problems need to be addressed urgently, say experts.

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“A strong economy cannot have a weak currency. But we must also understand that exports are suffering, job losses are happening. And the main reason behind the appreciation is inflow of hot money, which needs to be tackled,” Rahul Bajaj, chairman, Bajaj Auto, told global industry leaders at the India Economic Summit Sunday here.

“The Indian industry is increasingly becoming competitive. But competition must be fair, giving all a level playing field,” Bajaj added.

The appreciation of the rupee has led to job losses in the textile, gems and jewellery and auto sectors, amongst others.

“Appreciation of the rupee is definitely a sign of growth of an economy, especially like that of India’s. But if it is not tackled soon, then it may give rise to inflation,” emphasised Gerard Lyons, chief economist and group head (global research), Standard Chartered, UK.

“India needs to raise about $500 billion for its infrastructure, a major chunk of which would come from overseas. Thus, it needs to think about the rise of rupee against baskets of currencies and not only dollar,” Lyons said.

According to B. Ramalinga Raju, founder and chairman, Satyam Computer Services: “Rupee is a matter of great concern and it has aggravated due to the government’s inability to reach the core of the issue.”

“Rupee rise is not a worry,” said Suman Berry, director general, National Council of Applied Economic Research.

“We are right now facing a global disorder. Change in exchange rates has happened in all major countries. What we should focus on is inflation,” she added.