The Libyan dinar is pegged to the SDR and is tightly managed. The huge stocks of foreign-exchange reserves mean that the authorities will be able to defend the currency should any pressure arise. We expect the peg to the SDR to remain over the forecast period. In 2011-15 the SDR is forecast to depreciate against the US dollar mainly owing to a depreciation of the euro, which is a component of the SDR, as a result of concerns about sovereign debt defaults and a possible break-up of the euro area. The dinar will therefore fall from an average of LD1.27:US$1 in 2010 to LD1.3:US$1 in 2015.