Egypt’s Net International Reserves increased USD1bn to a total of USD16.6bn in August reflecting, in our view, the country receiving a USD1bn deposit by the United Arab Emirates amidst absence of major debt servicing payments. The deposit comes to partially fulfill the IMF’s required additional funding of USD5-6bn in order for the Staff-level agreement for a USD12bn loan to be ratified by the IMF board. The increase brings import cover back to the 3.5 months mark after it had dropped to more than a year low of 3.3 months in July. We expect reserves to receive further boost in 4Q2016 from: i) additional funding IMF asked for, likely including a USD2bn deposit from Saudi Arabia; ii) USD2.5bn first tranche of the IMF loan; iii) USD3bn Eurobond likely to be issued sometime in October; and iv) USD1bn as first tranche from a USD3bn loan from the World Bank. This would leave the CBE with a comfortable reserve buffer of USD8-10bn, in our view, ahead of a planned adjustment to the EGP. (CBE, Mohamed Abu Basha)