New Delhi: Exporters, hit by a demand slump in the global market, have sought RBI's intervention for dollar credit from banks at competitive rates.
Exporters in the small and medium sector are not getting
dollar credit, and if made available, the same is much above
the RBI's fixed rate of 3 per cent plus benchmark global
interest rate (LIBOR), FIEO President A Sakthivel said in a
statement.
Availability of dollar denominated credit is need of the
hour for exports, Sakthivel said, adding there is an interest
rate advantage in borrowing in the US currency.
"RBI may urge banks to provide dollar loans at LIBOR +
300 basis points which are cost competitive to the MSME export
sector to enable them to manufacture products to a recession
hit international market, which is sensitive to pricing,"
Sakthivel said.
To provide dollar credit to exporters, the government has
set up a committee, comprising the Finance Secretary, the
Commerce Secretary and the Indian Banks Association.
India's exports remained downhill for the 11th month in a
row, declining by 19.4 per cent to USD 14.28 billion in
August.
For the April-August period of the current fiscal, the
overseas shipments dropped by 31 per cent to USD 64.12 billion
from USD 92.95 billion in the same period last year.
Bureau Report
First Published: Tuesday, October 06, 2009, 16:15