AMMAN — The exchange rate of the
euro against the dollar, witnessed a sharp decline
on Tuesday when the euro reached its lowest in 20 years, being almost equal to
the US dollar.
اضافة اعلان
This decreases the value of the debt and the cost of
repaying Jordan’s foreign debts denominated in euro and reflects on to
stability of foreign reserves at the
Central Bank of Jordan, say economists.
This decline in the exchange rate constitutes
benefits Jordan economically, economic analyst Mohammad Akef Al-Zu’bi told
Jordan
News, adding that it will reduce the value of the external debt denominated
in euro and have a positive impact on Jordan.
He warned, however, that this is only a short-term
occurrence, and that it has a negative impact on the trade and tourism sectors.
“The value of the debt rises and falls with the
decrease in exchange rates. In the short term, the benefits resulting from the
public debt are due to the fluctuation of the euro exchange rate, but in the
long run, it is a neutral effect,” Zu’bi said.
“The decline in the exchange rate will weaken the
competitiveness of Jordanian exports, which is already weak in the
European market, and will increase the competitiveness of goods imported from the EU.
The trade balance will be affected in the tourism sector due to this decline in
the exchange rate,” he added.
Vice President of the
Jordan Chamber of Commerce
Jamal Al-Rifai told
Jordan News that “there is both harm and benefit in
the trade sector due to the low exchange rate of the euro against the dollar,
which has an impact on imports.
As for Jordan’s exports to Europe, “the European
market will need to buy products from Jordan. Our case is like the case of
other countries exporting to Europe, because the exchange rate is linked to the
dollar more than the euro,” Rifai added.
The tourism sector, according to the chairman of
Jordan Inbound Tour Operators Association, Awni Kawar, tourism from Europe will
be greatly affected.
“The value of the decline represents the profit
margin achieved by workers in this sector, which means a great loss for them,”
he said.
“Offers are being made for incoming tourists from
now on and they are fixed at a certain price. When the euro fluctuates, the low
exchange rate means incurring a loss as the profit margin goes into the
currency difference, and we are talking about amounts in the hundreds of
thousands,” Kawar added.
“Tourism from Europe to Jordan recovers in March, April,
May, September, October, and November. The other half of the year is not
considered an active season. The current damage is related to the bills for the
past period. Also, the
European tourist will pay larger sums when exchanging
the currency, and this is reflected in the decline of the already weak tourist
movement in this period,” he said.
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