Effect of rupee depreciation on export & import companies

ccsentha

ccsentha

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With the new budget, will the importing companies report less profits such as softlogic (retail sector)? would Export companies report more profit? with the rupee depreciation.

Last edited by Quibit on Sun Nov 27, 2011 7:24 pm; edited 2 times in total (Reason for editing : title corrected)

Rajaraam

Rajaraam

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True story is immediately importers would be effected little. After few months price would be adjusted and traders will not be effected.
But exporter will immediately gain unexpected profits. After couple of months they compete each other and export price would come down and they will earn same %of profit.
Finaly depriciation will give nothing to our Economy.

monash

monash

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We can't exactly say it will decrease profits of import companies. Yes, it's true that there cost of imports will increase by 3%. But on these days foreign currencies also depreciating due to euro debt crisis. It is temporary hopefully.

On the other hand, its true that rupee depreciation good for exports. Again it depends on how they manage it. Their cost of production will go up if they import raw materials. Foreign buyers won't come to us just because the price decrease, they have to market their products effectively internationally.

I believe it's all depend on the hands of marketing. If they implement correct strategy it won't affect import companies much. especially big companies.

Due to rupee depreciation, inflation will go up for sure as Sri Lanka import most of the goods.

sriranga

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Please see the diagram in the link.
http://forum.srilankaequity.com/t12996-sri-lanka-treasuries-yields-sharply-up#85179

mark

mark

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Rajaraam wrote:True story is immediately importers would be effected little. After few months price would be adjusted and traders will not be effected.
But exporter will immediately gain unexpected profits. After couple of months they compete each other and export price would come down and they will earn same %of profit.
Finaly depriciation will give nothing to our Economy.

correct raja,bt the way it was done is wrong,as usaual executive overrode the CBSL independency.. Nuts

WildBear

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If we consider immediate effects, I see it's good to CSE; Foreign investors can buy more stocks for their Dollars, creating more value for investments.

insidertrader

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Other than tea, rubber and may be spices almost all the raw materials from petroleum to even ceramic clay are imported. So even export companies don't have a special advantage out of this.

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Effect of rupee depreciation on export & import companies

1 Effect of rupee depreciation on export & import companies Sun Nov 27, 2011 1:29 pm

ccsentha

2 Re: Effect of rupee depreciation on export & import companies Sun Nov 27, 2011 1:44 pm

Rajaraam

3 Re: Effect of rupee depreciation on export & import companies Sun Nov 27, 2011 1:55 pm

monash

4 Re: Effect of rupee depreciation on export & import companies Sun Nov 27, 2011 2:01 pm

sriranga

5 Re: Effect of rupee depreciation on export & import companies Sun Nov 27, 2011 5:08 pm

mark

6 Re: Effect of rupee depreciation on export & import companies Sun Nov 27, 2011 10:10 pm

WildBear

7 Re: Effect of rupee depreciation on export & import companies Sun Nov 27, 2011 10:19 pm

insidertrader

8 Re: Effect of rupee depreciation on export & import companies

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