Citi has downgraded its recommendation for Egypt’s USD bonds from overweight to market weight. The strategists note that while the risk of restructuring in 2024 is low, the lack of positive catalysts and external financing challenges, mainly due to disruptions in the Red Sea, make the bonds less attractive. They mention that a larger-than-expected IMF deal could provide some positive impact but express concern over the slow pace of devaluation and clearing the FX backlog.