The Tunisian dinar has remained resilient in spite of the protests, but if the unrest is sustained, it may put downward pressure on the currency. Full liberalisation of the dinar will occur only after the forecast period. Initially, the dinar will remain pegged to a basket of currencies, of which the euro accounts for around two-thirds. The EU has said that it aims to finalise negotiations on Tunisia's advanced status application by July, which will grant it preferential trade terms. Full currency convertibility will require major reforms to the banking sector. In the interim period, the BCT will take a more flexible approach to exchange-rate management, reducing its interventions in the foreign-exchange market. We expect the dinar to weaken against the euro in 2011 but to strengthen in 2012-13 before weakening again for the remainder of the forecast period, reaching TD1.65:EUR1 by 2015. We expect the dinar to strengthen against the dollar, from TD1.41:US$1 in 2011 to TD1.29:US$1 in 2015.