The depreciating rupee against dollar has a short-term benefit for the IT industry and the sector should not depend on currency management for profits, a top functionary of industry body Nasscom said.
Nasscom President Som Mittal also said the US immigration bill will have a negative impact on American companies also and hence those corporates are also demanding their government to remove some of the provisions.
“While in the shorter terms you might say that currency depreciation may be beneficial. But it’s very narrow. Majority of the contracts we take on long terms basis for five years,” Mittal told reporters on the sidelines of an event.
“We also hedge at the our contact price. So if we had bid a contract at Rs 54 per dollar then we would also have covered for the next five years for that value,” he added.
After plunging to all time low yesterday, the rupee today recovered by rising 32 paise to 60.40 against the dollar in early trade at the Interbank Foreign Exchange market on fresh selling of the US currency by exporters and banks. The rupee had tanked by a massive 106 paise to close at all-time low of 60.72 against dollar in yesterday’s trade.
“It is not that we are going to get windfall profits always. In fact, as an industry we do not think currency management is our core competency and our core competency is to get the business delivered and get money,” Mittal said.