Athena Karsera
IT’S a godsend for British tourists and expat pensioners, and a nightmare for Cypriots with children studying in the UK.
Pegged to the plummeting euro, the Cyprus pound is hovering a whisker away from parity with sterling, with the local currency hitting a 30-year low against the British pound on Wednesday.
The strength of sterling means that expats receiving UK pensions will have plenty to smile about this Easter, while British holidaymakers see their spending power boosted. But parents sending their children to study in the UK need to fork out more and more Cyprus pounds to pay their children’s fees and living expenses.
And with no sign of sterling losing ground in the near future, many parents are now wondering whether Britain is a viable option for their children’s education.
Wednesday’s spot rates showed the Cyprus pound at a 30-year low of 1.015/1.019 for every pound sterling.
"This is the highest I can recall for almost thirty years, when Cyprus broke the link with sterling," a Central Bank official said. Yesterday the Cyprus pound clawed back a fraction of a cent to 1.0186/1.0226 against sterling.
Since the beginning of the year, sterling has enjoyed an 11-year high against the European currencies locked into the falling euro, to which the Cyprus pound is pegged.
For Britons living and working in Cyprus, it’s excellent news. Not only is UK income worth more, but Cyprus now boasts more favourable interest rates than the UK and the cost of running a British offshore company on the island has fallen.
One British pensioner living in Cyprus yesterday told the Cyprus Mail, "I think it’s great. It’s like a bonus and that bit extra really helps to make life more comfortable."
Foreign exchange experts at Thomas Cook travel agents said British visitors to Cyprus were getting over ,65 sterling extra worth of currency for every ,500 sterling of Cyprus pounds they purchased, in comparison with early 1999.
Tourist bookings from the UK for Easter were up 90 per cent over the holiday period last year, due to a combination of poor British weather and the stronger pound. The CTO says 47.5 per cent of 1999’s tourists to Cyprus were British.
Commenting on the tourist figures last week, senior CTO marketing representative Lefkos Phylactides said that UK statistics showed an increase in the overall British market of seven per cent for summer 2000. He said British arrivals to Cyprus were expected to be 31 per cent up on last year, already a record year.
But what’s good news for the British is very bad news for Cypriot parents. Christina Papazachariou, board member of the Cyprus association of fee-paying overseas students, yesterday told the Cyprus Mail, "Definitely this causes great expense to Cypriot students and we will definitely think twice about sending our children overseas from now on."
Papazachariou, who is currently paying about C,32,000 a year to send two of her children to British universities, said the association had already taken steps to convince the government to increase its student subsidy.
"Currently they give us ,500 more than is given to students studying in Cyprus. They give them ,1,000 and they give us ,1,500, which is nothing compared to the damage we are suffering from the strength of sterling."
She said the association would be taking further action, including making it known through the British High Commission that "from now on, we will avoid sending children to Great Britain because the situation is unacceptable".
She said the currency fluctuation made an already expensive endeavour even more costly: "It’s not only the tuition, the cost of living is also very high. Rents are very high in England. Here you can find a two-bedroom flat for ,150. There you need ,500, which means that from now on there will be many fewer students going to England."
Papazachariou said most families would make the necessary sacrifices to let their children complete their studies, but "if we’d known this would happen we would not have sent them to England… I believe that from now on since there are the Greek universities, the Cyprus University and the local colleges that have been accredited, we will definitely avoid England."
Last year, 62 per cent of Cypriot overseas students were studying in the UK B Cyprus is Britain’s 13th biggest market for foreign students.
