THE volatility in the exchange rate has added to the woes of exporters. Banks are now asking exporters who availed of pre-shipment and post-shipment credit in foreign currency to either reduce the exposure arising from depreciation of currency by remitting funds, or appropriate export proceeds to that extent, said Mr M. Rafeeque Ahmed, President of the Federation of Indian Export Organisations (Fieo). The move would deprive exporters of the funds and add to the liquidity problem at their end. The root of the problem lies in the practice followed by banks, i.e. applying the Notional Exchange Rate fixed on the last day of every month at the time of disbursal of export credit in foreign currency. This is done in order to maintain control.
Posted on: Fri, 19 Jul 2013 06:51:55 +0000
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