Riyal On The Ropes

The Yemeni riyal has weakened 2.2% so far in January, to trade at YER211.87/US$ at the time of writing on January 29. We expect to see further downside for the unit through 2010. Indeed, the long-term chart shows that the riyal has, for the most part, moved in only one direction over the past 10 years and we do not expect this state of affairs to change. We have revised down our end-year target to YER225.00/US$, from YER215.00/US$ previously, but we see risks weighted to the downside.

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