The Syrian pound has been loosely pegged to the IMF's special drawing rights since October 2007 and is tightly managed by the Central Bank. The authorities are unlikely to let the pound float freely, because they place a high importance on exchange-rate stability. Weakness in the euro zone (the euro is a major component of the Central Bank's currency basket) caused the pound to depreciate against the US dollar in the first half of 2010, although it has recovered since, resulting in an estimated average exchange rate of S£46.4:US$1 for 2010. Persistent worries about the euro in 2011 will lead to a slight depreciation of the pound against the dollar, and we forecast that it will average S£46.7:US$1 in 2011-12. The Central Bank had healthy foreign-exchange reserves-US$17.4bn (about 13 months of import cover) at end-2009, leaving it well placed to maintain control of the local currency.