Further Appreciation In Store

The resultant widening of interest rate differentials between Paraguay and major developed economies, combined with the country's strong growth outlook, will in our view make holding the guarani increasingly attractive, putting further upside pressure on the currency. As such, our outlook for the Paraguayan guarani remains bullish, and we expect the unit to average PYG4,400/US$ for 2011 and PYG4,200/US$ for 2012.

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