Upside Revision To Rial Forecast

On the back of the current buoyancy in the global oil market, at least in relation to earlier this year, we have revised up our end-09 forecast for the Iranian rial. At the time of writing, the rial was trading at IRR9,956/US$; we expect it to weaken to IRR10,100/US$ by year-end (our previous forecast was IRR10,970/US$). This would represent 2.8% y-o-y weakening against the dollar. Thereafter, we see the unit continue to fall, and have pencilled in annual depreciation of 3.0% in both 2010 and 2011.

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