KARACHI (May 02 2003) : Most of the exporters supplying goods to European countries have increasingly started opening their letters of credit (L/Cs) in euro getting better return than the greenback, said exporters.
They said the situation has dramatically changed since the physical birth of the euro and the continuous decline in dollar's value against all major currencies. The dollar has been under pressure for last three years.
Exporters said for the last four months the euro has proved a dominating currency against the dollar, which provided Pakistani exporters chances to earn more rupees by opening L/Cs in euro.
The State Bank of Pakistan has been making efforts for the last three years to keep the dollar at a certain higher level against the rupee enabling the exporters to remain profitable.
For this purpose, the SBP bought several billions of dollars from the open market and interbank markets during this period.
Exporters, in the past have been claiming to become losers because of rupee's appreciation against the dollar.
“The scenario changed in last six months which made the euro more profitable currency for the exporters”, said a leading exporter, adding there is no more cry against the appreciation of rupee against the greenback or the euro.
The euro touched an all-time high on Wednesday by crossing Rs 64 showing its strength in the world currency market.
“There is a possibility that the greenback might take a strong posture once the US starts selling Iraqi oil, and enabling its economy to grow stronger,” said the exporter.
The exporters said the dollar has been losing weight especially for the last three years as the US economy has failed to show strength. After the first US attack on Iraq, the US economy had started picking up and the dollar gradually got stronger, but it could not get hold over the situation for long and economy started slipping, they added.
The European Union is the second biggest importer of Pakistani goods. This year, Pakistani exporters got special concessions from the EU because of the country's participation in war against terrorism and they exported more than the previous year.
“In this scenario, we believe that the euro would be the best alternative for the exporters to accept it and open L/Cs in the euro,” said an exporter.