Egypt’s Net International Reserves (NIR) were nearly flat M-o-M in January at USD16.5 billion, according  to Central Bank of Egypt (CBE) data. NIR’s import cover remained stable at 3.1 months.   AfDB loan balances Paris Club payment: Reserves rose USD30m in January as a USD600m installment to Paris Club was largely covered by a USD500m loan from the African Development Bank (AfDB) which CBE confirmed was received in mid-January. The balance can be largely explained by a USD90 million appreciation of the value CBE’s gold reserves as holding of foreign currencies fell USD48m in January. It is worth noting that tier II reserves, which were boosted in past two months by USD900m, are nearly depleted with the balance falling to USD83m in January. Movements in tier II reserves are hard to track with CBE not providing many details; we believe they are largely used to cover different payments and liquidity injections while avoiding volatility in headline NIR numbers, which are the ones closely tracked by the market.     No news yet on World Bank loan; government seeking more Saudi aid: NIR is set to be boosted over the coming few months by: i) USD1 billion World Bank loan and ii) USD1 billion loan from China. Both loans are likely to provide short-term support to foreign reserves. A recent deal with Saudi Arabia to supply three-month needs of petroleum products would also ensure a more moderate rate of reserve burn in 1H2016. Minister of International Cooperation Sahar Nasr lately said the government is still negotiating additional aid with Saudi Arabia and recent news suggests the government is approaching the UAE for a bond sale.   Maintain view on USD-EGP: We maintain our view that a potential devaluation of the EGP is not likely to materialise now, but more likely in 2H2016. A devaluation would be conditional on building a liquidity shield, in our view, that enables the CBE to manage the process and create stability. We see the latest decision to ease foreign currency cash deposit limits and revive a swap mechanism between foreign exchange bureaus and banks to exchange other foreign currencies against USD as signs that the CBE is on the path to devalue EGP. (Mohamed Abu Bashu, CBE)