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Premji blames Americans for weak dollar

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Press Trust of India New York
Last Updated : Jan 19 2013 | 10:28 PM IST

"I think the fundamental problem (behind the weak dollar) is the very low savings rate among Americans," he said in an interview to US business publication Forbes.

The savings rate is virtually zero per cent among Americans, while the same is at 35 per cent and 45 per cent for India and China, respectively, Premji said. Replying to a query whether he was worried about the weak dollar, Premji said, "The weak dollar is not good for our business, since we get paid in dollars".

However, on a positive note, the Wipro chief said the dollar seems to have stabilised. "I do not see it getting much weaker, because the US is a source of creativity and innovation," Premji said.

The weakening of dollar has been a key concern of Indian IT firms such as Wipro in the recent past. As exports account for a major chunk of their revenues, a stronger rupee affects their profit margins adversely and this phenomenon has somehow started to rob the Indian firms of their low-cost status.

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In its latest annual filing to US market regulator SEC, NYSE-listed Wipro said the appreciation in rupee against major currencies such as dollar could adversely impact its revenues, margins and even competitive positioning in the industry.

Echoing these views, another US-listed Indian IT firm Infosys, the country's second-largest software exporter after TCS, said in its annual report that results of its operations get adversely affected as the rupee appreciates against the dollar and other foreign currencies."

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First Published: May 28 2008 | 5:29 PM IST

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