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Economists confirmed that the current debate between the dollar (USD) and the Euro (EUR), and the parity achieved by the green currency in the last period after 20 years, tended toward strengthening the Qatari Riyal (QR) and its purchasing power at the international level, given the linkage of the QR exchange rate to US dollar.
The Economists elucidated to Qatar News Agency (QNA) that the rise in the value of the US dollar would largely contribute to reducing Qatar's imports of European commodities, which represent 25 percent of the structure of commodities and services supplied from abroad, in addition to its reflection on the investment and purchasing capabilities of the Qatari tourist, who usually travels to Europe at this period each year.
In a statement to QNA, Dr. Rajab Al Ismail, Assistant Professor of Accounting College of Business and Economics of Qatar University (QU), emphasized that the parity of the US dollar exchange rate with the Euro is apparently due to a myriad of reasons, including Russia-Ukraine war, and the increasing pressures on the European economies, especially on the rise of oil and gas prices. He added that the skyrocketing price resulting from the relatively conservative fight against inflation on the part of the European Central Bank overshadowed the performance of the Euro, and caused its historical decline against the US dollar.
The price of the Euro fell, earlier last week, below the symbolic threshold of the US dollar, which has not been crossed since December 2002, impacted by the bleak expectations of the European economy, and the possibility of cutting off Russian gas supplies almost entirely, as the European currency fell about 12 percent of its value since the beginning of 2022.
Dr. Rajab Al Ismail confirmed that the status of the Qatari economy in the face of the apparent fluctuations between the Euro and US dollar remains excellent, in accordance with the growth indicators confirmed by international economic institutions on the model of IMF and World Bank pertaining to growth projections in the State of Qatar during 2022 & 2023. He indicated that the relationship between oil prices and the US dollar, including the substantial increase that has been made in energy prices since the beginning of this year, enabled the State of Qatar to achieve substantial imports, adding that this would unequivocally contribute to achieving surplus for the general budget.
For his part, the Dean of the College of Business & Economics at QU Dr. Khalid Shams Al Abdulqader affirmed to (QNA) that Euro fell to equal the US dollar for the first time in 20 Years, indicating that there was a myriad factor that caused this milestone. He explained that US Federal Reserve Board raised the interest rate three times, while European Central Bank did not take any action.
The US Federal Reserve Board raised the interest rate for the first time by 25 points, 50 points the second time, and 75 points the third time to overcome inflation, which rose to levels exceeding 8 percent. In return, the European Central Bank did not intervene to raise the interest rate in the eurozone, where inflation rates exceed 7 percent.
He elucidated that when the interest rate is raised, the demand for the currency will subsequently increase, and therefore the level of confidence and demand for the US dollar against other currencies increases, in the willingness of investors to achieve higher returns, pointing out to the erosion of confidence levels in the European currency for multiple reasons, including the Russian-Ukrainian war that led to the feeling of instability in the eurozone, which portends grim image for the future of the European Union in light of the Russian threats to the EU countries.
He further pointed out that Russia utilizes the weapon of energy to strangulate the European countries, especially Germany which no longer tolerates the severe shortage of energy supplies, which has substantially affected the attractiveness of holding the Euro, whose value deteriorated against other currencies, especially the US dollar.
