Litmus Test?

Zambia not out of the woods yet as IMF, China back Sri Lanka

By David Whitehouse

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Posted on March 22, 2023 08:47

Moves by the International Monetary Fund (IMF) and China to rescue debt-stricken Sri Lanka have been heralded as a positive sign for resolving Zambia’s debt restructuring process – but economists warn that the southern African nation still has a long way to go.

The IMF said on 7 March that Sri Lanka, which defaulted on its sovereign debt in April 2022, had obtained financing assurances from all its major creditors, including China. On 20 March, the IMF agreed a funding package worth about $3bn to support Sri Lankan economic reforms.

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