Riyal lost 33.3pc against euro due to dollar peg in 2003: Study, 

DOHA: For the Qatari riyal (QR), 2003 was a bad year as it took an unprecedented beating against major world currencies due to a tumbling dollar to which it is officially pegged.

The riyal lost a huge 33.3 per cent against euro last year. The dip was barely 5.2 per cent in 2002, according to an analysis apperaing in the latest edition of Qatar Economic Review, a periodical published by the Qatar National Bank (QNB).

The Qatari currency's second largest decline was against the Swiss Franc: 26.6 per cent. This figure was only 8.3 per cent in 2002.

The loss was also high at 18 per cent against the British pound. The percentage was a meagre 4.3 in 2002. The Japanese yen showed a 15.9 per cent gain against the Qatari riyal last year, as against 3.2 per cent in 2002.

The year 2000 was a year of major gain for the Qatari currency as it rallied by an impressive 13.5 per cent against the euro and 11 per cent against the Swiss Franc. The rise was a marginal one per cent against the British currency.

The only currency the riyal lost to in 2000 was the Japanese yen with the drop being 5.7 per cent, down from 14.9 per cent in 1999.

The riyal's slide against these currencies did not auger well for inflation in the country as it had to pay more for commodities imported from Euroland, Britain, Switzerland and Japan. Imports are higher, especially, from the European Union.

Preliminary estimates released by the Planning Council suggest a 28.2 per cent increase in imports in the first half of 2003. The figure reached QR8.8bn, up from QR6.9bn in the corresponding period last year.

The increase was mainly due to a rise in capital equipment imports for major energy projects. Qatar's regular imports include machineries and mechanical appliances, automobiles and accessories, pharmaceuticals and foodstuff.

Currency traders in Doha, however, insist that 2003 should be treated as an exceptional year as the situation is expected to improve considerably this year with the dollar showing signs of recovery.

"We hope the Qatari currency will substantially improve upon its 2003 record this year," said a forex operator.