THE STRENGTH of the euro against sterling and the dollar is putting severe pressure on exporters, representative bodies warned yesterday.
Sterling has fallen by 7 per cent against the euro since the start of January while the dollar has fallen by 8 per cent over the same period, the chief executive of the Irish Exporters Association, John Whelan, said. "We have had a two-year continuous slide in the value of the dollar, with a 20 per cent fall in the period since January 2007 alone."
Sterling is now falling in tandem with the dollar, he said.
Exports to the UK account for €16.4 billion of total Irish exports, while exports to the US account for €15 billion. The deepening credit crisis is putting these exports at risk, he said.
Mr Whelan said the rapid fall in the value of sterling in recent months was hitting the large number of small exporters whose main market was the UK. "A continued fall in the value of sterling against the euro would have a severe impact on the indigenous exporters in Ireland."
The assistant director of the Small Firms Association, Avine McNally, said its members are suffering a "crisis" caused by the worsening sterling/euro exchange rate.
More than 70 per cent of small companies that export, do so to the UK, which accounts for one third of all small business exports, she said. "All the indicators are that the situation will continue to deteriorate, with economic commentators now predicting that the exchange rate would rise above 135 cent during 2008. The consequences are extremely worrying."
