New Delhi: Fast declining rupee can have its serious impact on industrial output. Indian companies are already burdened with overseas loan and in such a scenario; weak rupee is definitely going to increase the problems of Indian manufacturers. Rupee decline continued on Thursday and touched the new bottom level of 54.60. However, rupee closed at 54.47 on Thursday.   

The confidence building statement from RBI helped rupee to recover in the early trading hours on Thursday. CEO of India Forex Advisors Abhishek Goenka has said that rupee is witnessing constant fall on day to day basis. However, with repeated intervention from the RBI, rupee may strengthen itself against US dollar.

Rupee has witnessed a sharp decline during last one and a half year at alarming rates; it has increased the overseas loan burden of Indian companies by to a tune of Rs 36,000 crore. Indian companies have borrowed USD 30 billion since January 2011. But, with the change in exchange rates of rupee, additional burden of USD 6.6 billion has been perceived on the Indian companies.    

Domestic loans have already become costly. Its effect has been seen on the last year’s industry output growth rates. Rising inflation and declining rupee are going to increase company’s overall cost. Jagannadham Thunuguntla from SMC Global Securities says that the companies may have bad quarter results of June 2012.

(JPN/Bureau)

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