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Devaluating currencies create headaches for exporters
03
Apr '09
The Chinese textile and garment industry as part of a plan to diversify markets has been exploring the countries of the African continent since a along time. Apart from doing substantial exports of a good quantity of textiles and garments, the sector has made substantial investments in the continent.

But undue and wild fluctuations against the dollar are making the Chinese tread cautiously, lest they lose money due to the same. In recent months, the Naira, the currency of Nigeria and one of the biggest export destinations from China has devaluated to a great extent against the US dollar.

The currency is fluctuating widely on a daily basis, putting at the great risk the earnings of the export enterprises. Exports, to Nigeria though of a few companies from the sector has grown in the first quarter of 2009, when compared to the corresponding quarter of the previous year.

The Naira had devaluated from 1:119 to 1:185 against the UD dollar in recent days and though it has rebounded in recent days, exporters from the sector are not daring to take the risk, lest they lose revenues when repatriating the foreign exchange funds to their home country; China.

Even in other countries like Russia and Ukraine, though their buyers have run out of stocks, the Chinese textile and garment exporters are wary of doing business for the same reasons and are willing to wait till the currencies of these countries stabilizes rather than lose money in doing business now.


Fibre2fashion News Desk - China

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