The impact of the currency exchange rate on tourism

Faqar Saadoun Hassan
Asst. Lect. Haider Diaa Salman

The exchange rate means (one unit of currency for one unit of another currency), and the exchange rate is determined in the foreign market, where all types of currencies are exchanged (Al-Kaabi 124:2003). This factor affects foreign tourism primarily, as the tourist inside the country practices the process of tourism spending in the national currency in circulation. As for foreign tourism, the tourist is required to exchange the national currency either for the currency of the visited country or for a global currency accepted by the visited country. This means that it is necessary to go through the process of currency exchange, which in turn affects the purchasing power of tourists and then affects tourism demand. The relationship is inverse here, as the lower the exchange rate of the currency of the receiving or hosting country for tourists, the higher the tourism demand for that country. Also, the lower the exchange rate of the currency of the host country for tourists, makes the duration of the visit scheduled by tourists last for a longer period, in addition to increasing the rate of tourism spending by these tourists. An example of this is Iran, as the exchange rate of the Iranian currency is very low against many foreign currencies, which encourages an increase in tourism demand, on various tourist sites in it. This is why we see a large number of Iraqi tourists traveling to it in recent years.