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August 30, 2012 divider image

On the backdrop of current economic environment in India, which presents a grim picture, an interesting talk was organized on 26th July regular meeting. The speaker was Mr Jatin Damani from Mumbai who is the head of currency derivatives division at Bonanza Financial Services Ltd, Mumbai. The falling price of national currency against other currency is often perceived as sign of weak economy. But how far is it true? Mr Jatin explained in simple manner the intricacies of currency market and the reasons for fluctuations in the price of rupee.

Contrary to common perception there are many sectors of the economy, which in fact benefit from the falling rupee. The IT industry, which is now, a torchbearer of the Indian economy is one such industry that gains immensely from weak currency. Many like export intensive sectors, hospitality industry are other sectors benefiting from fall in rupee. But unfortunately these are only few who benefit, majority of the sectors lose out due to weak currency. India being dependent for it energy requirement on oil imports is always at the receiving end. High oil prices coupled with weak currency are a double whammy for the economy.

According to Mr Damani the major problem lies within the country like lack of policy decision and poor economic environment. These factors are very much within the control of Indian government and unless these things are set right we will continue to see weak rupee. The speaker also explained some derivative strategies which businessman can use to hedge their currency risk.

Earlier President greeted members on their birthdays and anniversary. Rtn Anuj Badjate introduced the speaker and Rtn Parag Paranjpe proposed a vote of thanks.

– Parag Paranjpe

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