Exporters hit by forex derivatives

Exporters hit by forex derivatives

Statesman News Service 
NEW DELHI, Sept. 3: Exporters hit by the rising rupee earlier this year, who chose to enter foreign exchange derivative contracts with banks to counter their losses, are now facing losses of a different sort. Having hedged their foreign exchange, the exporters are now facing huge losses as the rupee has fallen against the dollar. 
The exporters from the small scale sector, however, have sought an amicable solution to their present predicament, stating that they were unfamiliar with the world of derivatives and were thus exposed to a greater risk and currency downslides. 
“We have taken up the issue with the Reserve Bank of India (RBI) and the finance ministry,” said Mr MR Venkatesh, president of the All India Forex Derivative Consumers’ Forum. Accusing the banks of flouting RBI norms, Mr Venkatesh said the exporters had faced losses worth hundreds crore of rupees. “The losses, if paid off, will wipe out the entire net worth of many companies, resulting in huge unemployment and attendant law and order issues,” Mr Venkatesh added.