Rupee depreciation to cost additional Rs. 66,000 crores, power cos. to incur huge losses: Assocham

January 11, 2012

Nearby 18% of rupee depreciation between May and December 2011 has added additional rupee cost of imports to the nation by Rs. 66,000 crores despite decline in the global prices of two major imported products crude oil and thermal coal according to the Assocham study on “Rupee Exchange Depreciation: Impact Analysis”.

The study analysed four major imported commodities crude oil, thermal coal, fertilizers and vegetable oil. It was observed that the importers had to pay an additional Rs. 489.8 per barrel to import the same quantity of crude oil though the dollar price of crude had significantly declined.



While in the case of thermal coal, the importer has to pay an additional Rs. 684.6 per metric tonne to import the same quantity of coal, for fertilizer Rs. 3658.3 per mt. and for vegetable oil imports Rs. 6,941.6 mt.

A sharp decline in the value of the rupee is bound to affect the power generation capability of power plants that are heavily dependent upon imported coal for electricity generation. Moreover, a fall witnessed in power generation capacity is likely to have an adverse affect on all the three sectors of the economy namely agriculture, industry and services.



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