Rupee hits 8-year high against dollar

Rupee hits 8-year high against dollar

By SiliconIndia   |   Thursday, 05 April 2007, 05:00 Hrs
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New Delhi: The rupee touched a near eight-year high on Wednesday, breaching the 43 to a U.S.dollar mark to touch 42.84. However, in the open market, because of the purchases from refiners and importers, rupee recovered to close at Rs 43.04 a dollar as against the previous close of Rs 43.06 on Tuesday. But RBI pegged its reference rate at Rs 42.90 on Wednesday.

The rupee has appreciated by 8.75 percent since July 19, 2006 and in 2006-07 it appreciated by around 4 percent. This will simply reduce the profitability of exporting companies by that many percentage points. The appreciation in the rupee will affect profitability of exporters, IT companies, and business process outsourcing firms.

At the same time it will help companies that are importing, since they can source products from abroad by paying less. Oil refining companies, which import crude petroleum products from abroad, are the biggest beneficiaries, reported a business daily.

For individuals going abroad, the appreciation in the Indian currency will mean shelling out fewer rupees to purchase foreign currency. In case of commodities like steel, aluminum and other metals, RBI and the government's policy to let the rupee appreciate have helped to an extent.

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