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Apparel exporters demand devaluation of currency
03
Mar '10
It is the desire of the Mauritius' textile and apparel exporter's that the Indian Ocean Island government should depreciate the domestic currency to aid them to face competition and thereby increase revenues and save jobs.

Already affected by expiry of a European preferential trade agreement, the sector in the previous year was thumped by the global meltdown and top officials of clothing companies apprehend that it may be further affected if the rupee continues to get stronger.

As per the statistics released by Mauritius Chamber of Commerce and Industry, textiles and garments, a keystone of island's economy, contributed 5.4 percent of the gross domestic product in 2008, as against 6.5 percent in 2007.

Being the main recipient of a $340 million's stimulus package floated in December, the sector also generates 11 percent of the jobs in Mauritius, while contributing Rs 28 billion rupees towards export earnings.

For clothing companies to retain their competitiveness, a correction of around seven to ten percent is needed in the exchange rate, which will also help in amplifying the foreign exchange contributions from exports by four billion rupees.

As against the rate of 69 rupees for a pound sterling in 2006, the rupee has seen new heights at 46 at present.

The textile sector which contracted by four percent in 2009 owing to less expenditure on textiles by consumers, is expected to grow by one percent in current year, as per the estimates of the Central Statistics Office.

A probable economic crisis is apprehended if rupee is not devalued. The Central Bank during last December, begun offering currency swaps to deal with the shortfall in liquidity in the foreign exchange market.

Fibre2fashion News Desk - India

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