Asserting that the right value of Indian rupee is 59-60 to a US dollar, Finance Minister P Chidambaram today said that government will make all efforts, including extending priority sector status to export credit, to boost shipments.
"We think that based on the REER (real effective exchange rate) value, that (59-60) is the right level of the rupee and it should not overshoot its mark.
"But even at 59-60, I think it is extremely competitive to export to many markets," the Minister told a gathering of exporters lobbies led by the Federation of Indian Exporters Organisation here.
"I think the rupee has to find its level. We think the level, not only I, but a large number of people, think that the right level of the rupee is between 59 and 60. But that is not something that I am willing to pronounce on.
The rupee, which had plunged to a life-time low of 68.85 on August 28 against the dollar, today settled at 62.51, down 44 paise from the previous close.
Speaking to the exporters on their their demand for "priority sector" treatment to export credit, he said his ministry supports this view and it is talking to the Reserve Bank on the matter.
"The Ministry of Finance supports the idea that export credit should be put in the priority sector list, but it is a matter on which we are talking with the Reserve Bank," Chidamabaram told a gathering of exporters lobbies led by the Federation of Indian Exporters Organisation (Fieo) here late this afternoon.
Apart from the Minister, the high-level meeting was attended by Commerce Secretary S R Rao, DGFT Anoop Pujari, and Revenue Secretary Sumit Bose, among others.
However, cautioning that there are some issues to be resolved before extending the priority sector lending (PSL) status to exporters, he said: "The fear is that if you put export credit to the priority sector, some other elements of the priority sector may get affected. We are in talks with the RBI (to resolve this)."
Chidambaram also noted that the Padmanabhan committee (of the RBI) has already made a number of recommendations on export credit, one is, of course, the cost of credit and the quantity of credit.
It can be noted that currently priority sector lending, which comes at a cheaper rate and that without much hassles, is limited to agriculture and allied sector lending and the