Rupee depreciation will enable export enterprises to earn more, increase reserves | Daily News

Rupee depreciation will enable export enterprises to earn more, increase reserves

Ramal Jasinghe. Picture by Sulochana Gamage
Ramal Jasinghe. Picture by Sulochana Gamage

The falling value of the Sri Lanka Rupee against the US Dollar, would bring much benefits to the exporter in terms of a greater inflow of currency to the export enterprise, said President National Chamber of Exporters (NCE) Ramal Jasinghe.

Speaking to ‘Daily News Business’ he said the drop in the Rupee against the Dollar, which is currently being observed brings about a great opportunity for export enterprises to earn more and in turn build Rupee reserves and look at capacity building and to make improvements in their businesses.”

“This financial strength in Rupee terms would enable exporters to make more investments to his enterprise and look at more automation and other technical advancements. We see the depreciating Rupee as a window of opportunity for the exporters and they should exploit this situation to their advantage.

The agriculture sector including tea rubber exporters are making gains with the drop in the rupee against the dollar.

Export earning in January and February increased by 8.6% to US$ 1, 881 million as against the corresponding period in 2017 which was US$ 1,733 million. Total exports in February 2018 was US$ 916 million which also showed a 5.5% increase over 2017 February.

Meanwhile Agriculture exporters increased to US$ 410.2 million in January and February 2018 showing a 2.9% increase as against the corresponding period in 2017. Minor agricultural products also saw an export revenue increase from US$ 15.9 million in JAN/FEB 2017 to US$ 18.7 million JAN/Feb 2018.

He however said that some of the value added exporters may find the depreciating Rupee and issue since cost of raw materials would move up and their margins becoming thinner.” He also said that high fuel costs too could have a major impact on cost of production and hence may lose the competitiveness in terms of pricing in the global market.

The way out of this is to look at more local value addition and to reduce the dependency of imported raw materials. Use of imported input as components and raw materials, should be researched and implemented , with a view to substituting such inputs with local products to meet demanding international standards.

“This commands the involvement of the scientific research and development community to join hands with the local industrialist and the export community and to intensify their R & D efforts to support the export drive.”

He also said that they are also looking at the positive steps taken by the Central Bank to correct this situation. He said that at the NCE they are also happy with regard to recent economic development efforts taken by the government to simplify export procedure and reduce red tape. (SS)


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