Rupee: Trouble for some, blessing for others

Several local and international IT companies are exploring the prospects of turning a crisis – a fast depreciating rupee which benefits exports but adversely impacts on the cost of living -- into an opportunity.

The lower value of the Sri Lankan rupee against the Indian rupee – Rs 113-114 to the US$ versus Rs 41-42 – was seen by some of the local IT players as an advantage, when it comes to dollar earnings. Speaking to The Sunday Times FT Madu Ratnayake, General Manager of Virtusa Colombo, a US-based IT company founded by a Sri Lankan expatriate which has operations in Colombo, Hyderabad and Chennai noted that, “suddenly, global money trends has made Sri Lanka, a slightly more attractive place to do business than India — at least in the short term. Players such as Virtusa and WNS who had IT services operations both in India and Sri Lanka have a small window of opportunity here”.

He said that they are assessing how the present financial situation in the country can be quickly transformed into opportunity. Ratnayake said that “the same thing is being done by Indian tourists for whom Sri Lanka is possibly the most affordable international destination today”.

Shift some work from Bangalore or Hyderabad to Colombo — and instead of worrying over dollar profits, one could count the blessings of a depreciating Lankan rupee, he said. The IT sector currently employs around 11,200 persons but by 2009, there would be shortfall of 3,500 IT graduates—seen as an obstacle to economic growth.