The Chairman and Managing Director of Export-Import Bank of India (Exim Bank) Yaduvendra Mathur on Thursday cautioned corporates against playing the currency game amid the volatility being faced by the rupee after the devaluation of the Chinese currency.
“There is no need to panic...but the industry should not try to gain from this…don’t play currency game,” he said while talking to the press after attending a meeting here. He stressed that it would be more prudent to hedge risks at this time and enhance efficiencies.
He said that while Exim Bank utilised the opportunity by picking up yuan at attractive rates, the industry too could make some cheap imports at this time by way of raw materials. He felt that by devaluing its currency, China was trying to export away inflation while neutralising the dominance of the U.S. dollar.
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Mr. Mathur did not see any great opportunity arising out of the present situation for Indian industry. He felt that even if China was slowing down, it was still miles ahead of Indian industry by way of scale. In this context, he advised Indian industry to go for scale-ups in their manufacture, concentrating on standardised products.
On Exim Bank, he said that the bank was now trying to evolve into a development financial institution, which was trying to make the nation as international.
He said that India need not worry unduly about the rupee volatility as “there was enormous depth in the economy and there was confidence about the country’s macro fundamentals.”
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He said Exim Bank was planning to open a new office at Dhaka.
He also urged SMEs to adopt a cluster approach and concentrate on the South Asian countries such as Myanmar, Vietnam, Cambodia and Laos. The bank now has a branch office in London and representative offices in Addis Ababa, Johannesburg, Dubai, Singapore, Yangon and Washington. Although its NPA had risen marginally there was no cause for worry he said and added that an annual growth of around 15 per cent was projected for loan sanctions.