Economy / Madagascar
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Ariary To MGA1,450.00/US$, End-08
July 2008 | Market StrategySorry, you must be a subscriber to view this article in full. If you are a subscriber please login.
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Madagascar's ariary has gained over 12.0% in recent months, and is now testing nine-month trendline resistance at MGA1,550.00/US$, potentially setting up further gains. Encouraged by this, we have set our end-08 target at MGA1,450.00/US$. The unit has gained 14.1% year-to-date, buoyed by FDI inflows into the mining sector, and traded at MGA1,562.00/US$ at one point on July 17. Going forward, we expect these inflows to continue to put upside pressure on the currency, since ongoing mining projects require an estimated 20% of FDI inflows to be spent locally during the construction phase. Further upside pressure stems from forthcoming loans from