Egypt’s net international reserves (NIR) stood at USD44.5bn in November, up only USD12mn from October’s levels, as they have remained largely stable for the past three to four months, data released by the Central Bank of Egypt (CBE) showed. The numbers came amidst the absence of any sizeable inflows that are set to pick-up next month, when Egypt is set to receive USD2bn (its fifth instalment of an IMF loan). Reserves’ import coverage stood at a comfortable 7.3 months. Meanwhile, Tier II reserves – representing other foreign currency assets, which the CBE does include in NIR – remained largely stable at USD7.7bn, covering around 70% of current foreign holdings of T-bills. We forecast foreign reserves to rise over the next few months with the government receiving its fifth IMF instalment this month and issuing USD3-4bn in Eurobonds in 1Q19. The strong reserve position, both at the level of NIR and Tier II, provide a comfortable cushion that enforces our view of a largely stable EGP in the next six to nine months barring any heightened volatility in global financial markets that could drive sharp outflows from the local market. In our base case, we see the USD-EGP weakening towards the end of 2019, when the CBE should be starting the easing cycle post June’s fuel subsidy cut.