HOURS after Zambia suffered a major setback with bondholders, the International Monetary Fund (IMF) reached a staff-level agreement with Zambia on the second review of its Extended Credit Facility, unlocking another $184 million upon IMF board approval, the Fund said on Monday.
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The IMF’s mission chief for Zambia added in a statement that the Fund welcomed Zambia’s memorandum of understanding with its official creditors and ongoing discussions with private creditors to reach an agreement on debt restructuring.She said Zambia may need to further tighten monetary policy to contain inflationary pressures and that building reserves would enhance the southern African country’s external resilience.
Earlier on Monday, Zambia suffered a major setback in its debt-restructuring efforts after the government said a revised deal to rework $3 billion of Eurobonds could not be implemented at this time due to objections from official creditors, including China.
Earlier yesterday, Reuters reported that Zambia had suffered a major setback in its debt restructuring efforts, after the government said yesterday a revised deal to rework $3 billion of Eurobonds could not be implemented at this time due to objections from official creditors, including China.
Zambia and the country’s official creditor committee (OCC) and the International Monetary Fund (IMF) had been at odds over whether the initial deal struck with a group of bondholders in late October offered comparable debt relief from bilateral as well as commercial lenders.
The IMF approved a tweaked deal, but official creditors again rejected it, Zambia said.
“The OCC, through its Co-chairs, concluded that Comparability of Treatment would not be achieved in the Base Case scenario, although would be achieved in the Upside Case scenario,” the government said in a statement, referring to a two pronged-approach that foresaw different le ECONOMIST, Yusuf Dodia has advised that now that the Zambia’s dream of having is foreign debt restructured dimmed, government gear itself into finding alternative means of sourcing for the money to pay off both the bilateral and the official creditors. – REUTRES
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