Euro depreciation might adversely affect export sector

14 Jun '10

1 min read

The depreciation of Euro has blown an air of concern in the Pakistan export sector, as it is likely to affect the Pakistani export proceeds earned from the European market. Around 27 percent of Pakistani exports are shipped to European Union (EU), which is the most highly priced and lucrative market for Pakistani export goods.

Current debt crisis in EU has caused constant depreciation of Euro against US dollar, as it has weakened by 16.3 percent, and against Pakistan rupees it has weakened by 14.2 percent. The impact of such depreciation in Euro will defer according to the companies and sectors depending on their export revenue, observed analysts.

However, Bilal Qamar, an analyst at JS Research, stated that, since some exporters have set their pricing in US dollar even for exports to Europe; the effect of declining Euro might reduce.

The exporters said that, it varies from company to company, as the export revenues of some companies are denominated in Euro and a number of other companies use US dollar as their primary foreign transaction currency.

This Euro depreciation can prove advantageous for companies having Euro denominated loans.

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