The Indian jewelery and jewelry industry has faced another problem - the fall of the Indian rupee, according to a weekly message from Diamond World. Last week, the exchange rate against the US dollar reached a record low mark - one dollar was equivalent to 58.64 rupees. Thus, from May 1, 2013 the rate of the rupee fell by 7.7%. Procurement of rough diamonds is made for dollars, and importers now have to pay more for the previous volumes of diamonds they buy. At the same time, diamond sales in the domestic market are not very active, market participants are afraid of inflation after weakening the national currency, which, according to some statements, will cause a drop in demand and sales.
This circumstance to a large extent spoiled the mood of Indian jewelers, already affected by the government's policy and the situation in the financial markets. Recently, the import duty on gold was raised, which increased from 6% to 8%, which jeopardized gold sales due to price increases.
All these unfavorable factors lead to the question of how jewelry manufacturers will calculate profit margins and how this will affect the final price of their products.
Although by Friday the rupee had played a little position from the dollar - the exchange rate was 57.79 / 80 rupees per US dollar compared to 57.98 / 99 rupees per dollar as of the closing of stock markets on Thursday - the markets are in shock and hope to improve the situation in the near future.