Rough diamonds may turn expensive by 2-3%; Weak rupee dulls solitaires’ lustre

The significant weakening of rupee against dollar in the past one week has made rough diamonds costlier by 2-3 per cent, raising concerns among the Indian diamond trade that cuts and polishes 80 per cent of the world’s rough diamonds.

Diamond traders are worried that a price hike will dampen the solitaire demand in Indian market that was gradually picking up in the country and had clocked a 7-8 per cent growth in FY15.

Rupee has weakened significantly since April 17, when it closed at 62.54 and on Monday fell to 63.77 almost touching the December 30, 2014 level when it closed at 63.79. “The volatility in rupee is hurting the rough diamond prices at a time when the exports are not picking up. More importantly, it will leave an impact on solitaire prices as they are not stocked by diamond trade.Most of the time, solitaires are bought on a weekly basis to meet the consumer need.

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Posted in: Indian Market Tips