Rising dollar to make import of electronics gadgets,TVs pharma products costlier

The rupee hit an all-time low of nearly 77 a dollar on Monday after Brent crude – the global oil benchmark – surged to settle around $ 130 after touching $ 139 a barrel. The prices of crude at this point of time are the highest level since July 2008 after the US said it was discussing a potential ban on Russian supplies with other countries.

At noon, the rupee was trading at 76.96 a dollar, down 1.03 percent from its previous close. It opened at 76.96 a dollar and touched a record low of 76.97 during the day.

The higher crude price will widen India’s current account deficit, which is the measurement of a country’s trade where the value of the goods and services it imports exceeds the value of the products it exports. A higher current account deficit is likely to put further pressure on the domestic currency.

A weak rupee or a strong dollar is favourable to the segments that are exporting like pharmaceutical and IT exports. The IT exports



from the State now stand at Rs 1.45 lakh crore and a higher valued dollar will increase it correspondingly.

“The export revenues will increase if the dollar stays at highs. If the trend continues for some time, several companies will show better quarterly revenues. But we see this as a temporary thing that is linked to the Russia-Ukraine conflict,” said Bharani Arol, President of software industry body Hyderabad Software Enterprises Association.

The rise in the revenues, if any, will not have bearing on the Indian payroll structures as they are paid in Indian rupee, he explained.

“The prices of electronic gadgets, TVs and others will rise for the end customers too if the import costs increase. The impact will be from the next quarter with slow and sluggish production and escalation of input costs will hinder the growth of the sector,” said Raminder Singh Soin, Managing Director, Resolute Electronics, which has assembly units in Hyderabad.