NEW DELHI, Aug 18: The Federation of Indian Chambers of Commerce and Industry (Ficci) has cautioned the government to exercise tight vigil and preparedness to ward off the negative impact of the rouble devaluation.In a statement issued here, chamber president K K Modi said the South-East Asian meltdown seemed to be spreading to other parts of the world. The devaluation of the rouble was very much on the anvil despite assurances by Russian authorities to the contrary, Ficci said.
The chamber attributed the devaluation to fragile economic system, mounting debt burden, sky-rocketing fiscal deficit and fast-depleting exchange reserves.
Modi cautioned that the continuing instability of the exchange rate in South-East Asian currencies coupled with devaluation of the rouble would create a new set of problems for Indian exporters. "Export competitiveness will be put to the test," Modi predicted.
The woes of the region could be further compounded if the yuan and yen are also devalued.
Referring to the world situation, Modi observed that the US economy, after registering a 5.5 per cent growth in the first quarter had slowed down to 1.5 per cent. The US exports were also facing problems due to the strengthening of the dollar in the midst of devaluations in the Asian region.
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