A dramatic showdown is taking place in Zambia. Bondholders, Chinese creditors, and the government are all involved, and the fate of the country’s financial stability is at stake. A crucial vote is scheduled to take place tomorrow that will likely determine if Zambia will become the first African country this year to default on a portion of its external debt.
At Tuesday’s meeting, bondholders are expected to decide if they will agree to the government’s request for a six-month interest-payment holiday, which will allow it to work out a debt-restructuring strategy. Other bondholders have already said no to the proposal, so whatever happens tomorrow will likely be the final word on the issue from private creditors, at least for now.
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