Cautioning against panic reaction on the currency front, Commerce Secretary Rahul Khullar on Tuesday said there was no cause for over-reaction to the weakening of rupee, which has touched an all time low of 52.73 to a dollar.
“I think you should not over-react to movements of exchange rates. Don't get carried away by what has happened. Things can improve and change equally and suddenly,” Mr. Khullar told reporters on the sidelines of an APEDA organised International Chef's conference here. The Indian currency dropped to a lifetime low of 52.73 a dollar in early trade on Tuesday on persistent demand for the U.S. currency from importers, amid sustained foreign capital outflows from the equity market.
Mr. Khullar said preferences of global investors have changed in the face of recent events in Europe and the U.S. “Asset preferences drive investors into taking decisions which affect not only exchange rates but also prices of commodities. Shuffling of investment portfolio has led to increased demand for the dollar and other commodities worldwide. However, in a fast-changing scenario change could be equally fast,” he said.
On the other hand, Mr. Khullar said several countries were creating market barriers denying their consumers taste and fragrance of the Indian rice. “Basmati is a premium product and there is no doubt that in some markets it is being singled out quite precisely because there is a market for it,” he said.
However, he did not specify the markets where the Indian Basmati rice was facing barriers like high tariff and stringent sanitary and phyto-sanitary (SPS) standards.
President of the All India Rice Exporters Association, Vijay Setia said the Indian basmati rice faced duty barriers in the European Union countries.
In China, there is an issue of pesticide residual. “Government can help with that,” he said during the conference. Chefs and food writers from the U.S., Mexico, Italy, France and Moscow are taking part in the conference.