A strong rupee: That's bad news for exporters

When a country adds a billion dollars to its foreign-exchange reserves in two weeks- India did recently, taking its total reserves to $77 billion (Rs 3,65,211 crore)-its currency is bound to strengthen against the dollar. That's a radical difference from the past when dollars were scarce; according to a recent issue of Economist magazine, India has the sixth highest foreign exchange reserves among emerging economies in the world today. Given the glut of dollars, it is no surprise that for-ex traders have adventurous estimates of the rupee's position a year from now.

Jamal Mecklai, CEO of forex trading firm Mecklai Financial believes the exchange rate could touch Rs 44 to the dollar in 2004 and Rs 45 to the dollar in 2005. The lull in the fabled American economic engine, the relative boom (an estimated growth rate of 5.4 per cent to 5.75 per cent in GDP is just that in these trying times) in the Indian economy, and with little chance of the US Federal Reserve slashing interest rates further, the rupee looks set to gain against the dollar. "All this clearly plays in favour of the rupee," says Mecklai, "and it means that NRIs will continue to bring in money and corporates will be selling forward".

Economist A.V. Rajwade isn't quite as bullish as Mecklai, but he agrees that the rupee can only get stronger. "The SARS-scare could benefit India," he explains. "It could become a preferred destination for foreign direct investment." Tempering those glad tidings is the fact that the strong rupee will make Indian exports uncompetitive, and shave some more off the rapidly thinning margins of Indian software companies.

-Debojyoti Chatterjee

MUDDLE
Price Unknown

India's telcos are doing their bit for the cause of education: if the telecom regulator allows them to have their way, they will soon convert their customers, at least some of them, into math whizs. The medium for this instruction in arithmetic is the tariff plan. Everyone knows that incoming calls on mobile phones are free starting May 1. But the rate at which outgoing calls depends on several factors: the service on which they originate, that on which they terminate, the geography of the call, and the time (peak or non-peak). Fortunately, all these proposals are before the regulator which could well decide to limit the number of tariff plans a telco can offer.

-Vandana Gombar

Return Of The King
Yesterday's laggard Raj TV is making waves in the Tamil satellite channel market.

M Raajhendhran operates out of a room filled with smoke from countless incense sticks and several statues of Ganesha. No shod foot has ever entered the room and the 51-year-old co-promoter of Tamil satellite channel Raj tv is the very picture of devotion. Someone up there must approve of such piety: Raj TV Group's two-channel (Raj TV and Raj Digital Plus) bouquet, claims Rajeev Nambiar, the CEO of Raj TV, is gaining mind-share in the dog-eat-dog Tamil satellite channel market.

Mind-share is the term to use: Raj is still a clear #2 (revenues of Rs 40 crore as compared to rival Sun's Rs 100 crore) in the market. But it has gained ground in recent months, a resurgence that can be attributed to some recent blockbuster programmes. Says S. Nalini, Senior Media Executive, Optimum Media Solutions (a division of Mudra Communications): ''Raj is definitely showing an upward trend in mindshare .''

And a fracas between Chennai's two largest cable operators, Sun's SCV and Hathway led to either Star's offering Vijay TV or Sun's secondary channels being blacked out in some areas. Raj didn't suffer. Now, if only the company can successfully go pay as it has articulated a desire to.

-Nitya Varadarajan