(Bloomberg) -- Zambia’s currency advanced the most in seven years on expectations the southern African nation is on the verge of reaching a deal with its official creditors on restructuring its debt. 

The kwacha rose almost 12% to as high as 17.425 per dollar, breaking above its 200-day moving average. The country’s dollar bond due July 2027 was the best performer among emerging-market peers.

The gains follow news that Zambia and its official creditors have made significant progress toward reaching a debt deal and are ironing out the final details, according to an official at the Paris Club. Creditors are likely to announce an offer at the summit for a New Global Financing Pact in Paris planned for June 22-23. 

A deal will allow the International Monetary Fund to disburse $188 million to the distressed nation which has the highest sovereign-risk premium in Africa, according to JPMorgan Chase & Co. data. Zambia has been in talks with creditors since 2020 to restructure its debt, imperiling economic growth. 

A resolution of Zambia’s debt crisis is seen as a test for how the Group of 20’s Common Framework will help revamp low-income countries’ unaffordable debts and how China coordinates relief with traditional Paris Club lenders as well as global bondholders. 

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