Strong Rupee and its impact on IT companies
The Indian rupee has appreciated by nearly 10% since late 2006 the currency is now hovering just above the symbolic Rs 40:1 USD. It suggests that the country's attractiveness to foreign investors is increasing and signals optimism about the Indian economy more generally. However, the concerns of exporters, who are part of India's economic resurgence, are rising as their goods become more and more expensive for overseas buyers. The main reason for the rupee's appreciation since late 2006 has been a flood of foreign-exchange inflows, especially US dollars. The surge of inflows into India has taken a variety of forms, foreign direct investment (FDI), investment and remittances sent home by Indian expatriates, External commercial borrowings (ECBs), foreign portfolio inflows (FIIs). Buoyant export growth has also built up India's foreign-exchange holdings. IT and business-process outsourcing (BPO) exports have expanded at an especially robust pace. However, the rupee's a...