Ludhiana, May 17
The rupee slumped to a record low to Rs 54.51 against the dollar on Wednesday. In fact, it has been the worst performing emerging market currency in Asia since March 1. The Indian currency is facing further losses as the country struggles with a slew of additional economic challenges, including sliding growth.

Analysts and market experts express concern over the rupee slide. President of the Apex Chamber of Commerce and Industry PD Sharma said the falling rupee had many repercussions.

“Exports will dwindle and to overcome the situation, the government will need to strengthen the MSME sector,” he said. India expects to see huge mark-to-market losses in the June quarter results. Another issue is that the country fulfils 80 per cent of its oil needs from imports and although the oil prices in the global market are falling, India has not been benefiting from it due to the weakening of the rupee.

Suggesting a way to revive the rupee’s sinking fortunes, tax professional Jatinder Khurana said government should pick up the pace of economic reforms. “If investors, local and foreign, become confident

that India’s economy is in for some rejuvenation, they could be prodded into investing in more local assets, such as stocks and bonds. That will increase the demand for the local currency and revive its fortunes,” he said.

Bank professional Harpreet Singh said, “I think rupee is likely to touch 56 to the dollar by June-end. As of now, the only support can come from the Reserve Bank of India.”

Exporter Nirmal Jain said, “The outlook is quite bleak. I think the stock market is open to a 5-10 per cent downside in the next month or two.”

Some market experts feel the rupee’s recent slide is not so bad after all. President of Federation of Punjab Small Industries Association (FPSIA) Badish Jindal said it could be a good opportunity for exporters. “Since they get their payments in dollars, they can cash in on the situation. It is due to competition that they are decreasing the prices, otherwise it can prove to be a blessing in disguise for them,” he said.

Another exporter Rajeev Makhija said, “A weaker rupee at a time of falling oil prices will reduce inflation concerns, while ensuing boost in exports can reduce country’s trade deficit. That will relieve pressure on the current account deficit and the balance payments. Depreciation of the rupee is part of the solution, not part of the problem,” he added.