Devaluation of EUR to have short-term effect on exporters to Europe

Ilustrative image (Photo: VNA)

Hanoi (VNA) – In the short term, the recent devaluationof the euro will affect a number of exporters to EU markets with contracts paidin the currency, according to Tran Thanh Hai, deputy director of the Import-ExportDepartment under the Ministry of Industry and Trade (MoIT).

He said such exporters will earn less profits calculated in theVietnamese currency. However, companies importing goods from the EU willbenefit from the euro’s devaluation.

In the long run, a weak currency will push inflation up in theEU and imported goods will become more expensive, Hai said, adding that itcould make EU consumers spend less, especially on non-essential goods, whichwill reduce demand for imported goods, including those from Vietnam.

The official noted that the Government and the MoIT hadidentified those problems from the beginning of the year, and the ministry hasbeen undertaking many solutions to address them, including helping businessesmake the best use of free trade agreements that Vietnam has signed.

At the same time, the ministry is working to link Vietnameseproducers with foreign suppliers through promoting trade promotion andexpanding markets using the internet.

The EUR is under devaluation pressure as Europe is facing anenergy crisis. It dropped to a 20-year low and came closer to parityagainst the dollar on July 11./.

VNA