MUMBAI, November 7: Exporters are expecting the rupee to lose further ground. They feel the current slide would continue till the rupee shed another 2 to 3 per cent against dollar. "Against the backdrop of the South East Asian currency crash, dollar should be valued at around Rs 38-40,'' said Ramu S Deora, President, Federation of Indian Export Organisations.

``Everyone knows rupee is overvalued by about 10-15 per cent. Rupee should be allowed to automatically adjust by 2-3 per cent every month. The Reserve Bank of India should not intervene, if rupee is moving within a band of 2.3 per cent," he said.

"I expect the the rupee to go down to Rs 40 by the end of November," said Manmohan Agarwal, General Manager, exports, Century Textiles and Industries Ltd. "Left to market forces the rupee will go down further, said CC Udheshi, chairman and managing director, Metro Exports Ltd, a large Mumbai based export house.

Since the growth in exports had been only 4.22 percent as on September, the exporters believe that the government will allow the rupee to depreciate in order to boost the exports. "The government want the export growth at 10 per cent. Other developing countries' products are becoming more competitive against Indian products after the allround depreciation of developing markets' currencies against dollar. There is no other choice for the government, but to let the rupee depreciate the Indian exports has to pick up," The exporters feel last week's devaluation of Pakistani rupee to Rs 46 against a dollar from about Rs 41 the previous week should prompt the RBI in letting the rupee depreciate by at least 2-3 per cent.

However, the exporters are not certian about the immediate benefits accruing to them as a result of Friday's slide in rupee. "The news of rupee's crash will be reaching our international buyers immediatly. They would demand a cut in price because of the benifits of a depreciated rupee," said an exporter.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.