The CFA franc is likely to remain pegged to the euro at a rate of CFAfr655.96:EUR1 during the forecast period, and will therefore fluctuate against the US dollar in line with the exchange rate between the dollar and the euro. As a result of interest rate differentials we now forecast a slight appreciation of the euro relative to the dollar in 2011, and then a return to the trend of euro depreciation owing to continuing concerns about the euro area debt crisis. As a result, we forecast that the CFA franc will strengthen to an average of CFAfr480.6:US$1 in 2011 and then depreciate to CFAfr506.5:US$1 in 2012.