“The Make-in-India campaign would get a boost from a weaker rupee,” said KN Dey, managing partner at United Financial Consultant, a forex advisory firm. “If you compare our macro data with those in other emerging markets, India needs to go a long way. The rupee has fallen against select currencies.” The dollar index, which measures the unit against six other major currencies, fell about 11 per cent this calendar year.
While the rupee has gained about 6 per cent against the greenback, it has weakened against other leading currencies such as the Euro, the Pound, and the Singapore dollar.
Among India’s top 25 trading partners, India had significantly positive balances of trade with Italy, the UK, and Singapore in the three months to June, going by data published by the federal commerce department.
India also had positive net exports in its trade relationship with the US, the UAE, Hong Kong, and Vietnam. The rupee has lost significantly compared with about 15 emerging market currencies, such as the Chinese Yuan, Thai Baht, and the Russian Rouble, and nine developed-market currencies including the Euro, Australian dollar, and the Canadian unit during the period, Bloomberg’s data on spot returns show.
“The central banks are not seen intervening strongly in those countries,” said Anaindya Banerjee, currency analyst at Kotak Securities. “Back home, the central bank is always seen controlling the rupee’s move whenever there are wild swings.
This has added to the rupee’s value loss to these currencies. Exporters have gained despite the local unit’s rise against the greenback.” “We do not have any direct currency swap with them but go through the dollar route,” said Rishi Sahai, managing director at Cogence Advisors, which specialises in cross-border financing and transactions between India and China.