With the rupee hitting new lows against the euro and gaining on the greenback with every passing day, Indian exporters are increasingly shifting their billings from dollars to euros.

On Friday, the rupee hit a new 13-month high against the dollar at 47.89 and a new low against the euro at 51.58. The euro versus dollar parity was pegged at 1.0770 -- that is, $1.0770 for every euro.

"The rupee is losing against the euro because the European currency is gaining strength against the dollar. Exporters are shifting their invoicing to the euro. Clients in France and Germany had earlier wanted to transact in euros but Indian exporters did not respond.

"Now they are only too willing to make a little extra," said the treasury head of a large manufacturing company. In the UK, exporters are preferring invoicing in pound sterling.

In January 1999, at the time of its birth, the euro-dollar parity was 1.18  (that is, $1.18 for one euro). In October 2000, the euro plunged to its lowest against the dollar -- 0.8225. Friday's level (1.0770) was last seen in October 1999 and the currency is inching towards the level at which it had started against the dollar.

Essar Steel recently shifted at least 10 per cent of its hot-rolled coil exports to euro invoicing. i-flex Solutions, the software solutions company, has shifted part of its billings to euros by setting up local subsidiaries to offset the hit on account of the rupee's appreciation.

Travel companies like Thomas Cook, too, have started booking tours to Euroland in euros and not dollars as the new currency flexes its muscle against the greenback.

However, exporters may not gain heavily by shifting currencies as clients are beating down prices to deny them the full advantage of euro billing.

"What we are seeing today is hard bargaining. The gain by shifting from one currency to the other has partially been offset as prices have been cut," said another company treasurer.

Indian exporters have been averse to euro transactions as they do not want to take a risk on two legs (first, dollar-euro and then dollar-rupee parities). However, they now do not mind doing so as the euro is appreciating and the rupee is steady against the dollar.

"The outlook for the euro is bright and it can only be stronger against the rupee. Indian corporates are encashing the appreciation," said a senior banker. No direct forward cover for the euro is available in the market but the cover is sold by deriving it through the dollar-rupee and then the dollar-euro rates.

However, bankers do not expect a radical shift to the euro as over 85 per cent of the country's trade is in dollars. The Reserve Bank of India, too, is not expected to shift foreign currency assets to the euro overnight even though globally central banks are changing their preferences.

"The Reserve Bank of India's priorities are safety and liquidity, and not return on assets. It has euro assets in its portfolio but the tilt still is in overwhelmingly in favour of dollars," said a banking industry  source.