Egypt’s foreign reserves are shrinking fast, from $36 billion in late ’10 to just $15 billion now. FRs are declining because foreign currency earned through tourism has collapsed. If this trend is not soon reversed the Egyptian pound will have to fall in value to curb demand for imports. But, that will cause inflation. To head this off, the IMF is working on a $3.2 billion loan. However, the loan won’t buy enough time to head off a currency crisis.