Importers Struggle as Euro Strengthens

Vietnamese importers of equipment and machinery from the European Union are facing challenges due to the strength of the Euro. Since last September, the European currency has appreciated by 17% against the U.S. dollar and is currently trading at a 17-month high. It has also gained 3.4% against the Vietnamese dong since the beginning of this year.

As a result, prices for importing machinery and equipment from Europe have increased for Vietnamese firms. However, exporters of textile, garment, footwear, and other goods are not affected as they mostly import intermediate goods from Asian countries like China. Wood and woodwork businesses have also reported no impact from the strengthening Euro due to weak demand, with imports of wooden furniture from the EU nearly coming to a halt.

Conversely, exporters of garments, textiles, seafood, and other items to Europe are benefiting from the situation, as 15-20% of their transactions are conducted in Euros. According to data from the Ministry of Industry and Trade, Vietnam’s exports in the first half of this year amounted to US$164.45 billion, a 12% decrease compared to the previous year. Exports to the EU were valued at nearly $22 billion, down 10% due to weaker demand.