The continued weakness of the euro has driven Oriental Weavers, a major Egyptian carpet company, to increase prices and try to renegotiate export contracts set in the European currency. The move came as the euro closed the week at US$1.23, just off its all-time lows. Many businesses that export to Europe have seen their profit margins shrink as the euro's value has declined, analysts say. Exporters such as Oriental Weavers feel compelled to renegotiate their prices with European clients to maintain profits.
"The currency is losing value and we have been trying to find a way to compensate for that loss," said Haitham Moneim, the investor relations manager for Oriental Weavers. "So we decided that we will go back to our customers and ask them if we can adjust our prices to make up for the lost value." Wealthier members of the euro zone are struggling to control the spread of financial instability. But the measures they have taken, including a 110 billion (Dh500.64bn) rescue loan package for Greece issued last month by the European Central Bank and the IMF, have failed to stabilise the euro.
Oriental Weavers' negotiations were delicate, Mr Moneim said. "The tricky part of the negotiation is how to maintain the balance, because we want to maintain our profitability but we don't want to upset or lose our customers." firstname.lastname@example.org