* Zambia bond prices drop after debt restructuring fallout

* China keeps lending benchmark rates unchanged

* Milei's Argentina win expected to pressure peso, buoy bonds

* FX up 0.5%; Stocks up 0.7%

Nov 20 (Reuters) - Emerging markets currencies gained on Monday and hit a nine-month high, with developments in Argentina - following far-right libertarian Javier Milei's presidential win - in focus, while Zambia's debt restructuring efforts faltered.

The MSCI's basket of developing markets currencies strengthened 0.5% to levels last seen in early February as the greenback eased on optimism that U.S. rates have peaked. Equities added 0.7%.

Analysts believe Milei's strong win, coming in the midst of a tense presidential election run-off, will likely put downward pressure on the Argentinan peso, though it could play better among bondholders.

"The news will be positive for bond prices and will generate pressure on the official and parallel FXs," said Bruno Gennari, Argentina expert at KNG Securities.

That would have to wait, however, as markets in South America's second-largest economy will be closed on Monday on account of a public holiday, though hard-currency bonds and some equities in Europe and the U.S. will trade.

"The impact of Milei's victory will be capped by the fact that he will have limited legislative leverage to implement economic reforms," Gennari added.

U.S.-listed shares of some Argentine firms rallied in early premarket trading with Anco BBVA Argentina up 5.4% and Grupo Financiero Galicia up 9.6%.

In frontier markets, the prices of Zambia's international bonds dropped, as per tradeweb data, after the government said a planned deal to rework $3 billion of Eurobonds could not be implemented at this time due to objections from official creditors, including China.

Meanwhile, China's offshore yuan strengthened 0.6% and hit a three-month high. The world's second largest economy left benchmark lending rates unchanged, matching expectations, as a weaker yuan continued to limit further monetary easing and policymakers waited to see the effects of previous stimulus on credit demand.

Investors also kept an eye on crude prices that ticked higher on expectations of oil-producing countries deepening supply cuts to shore up prices.

Major oil exporter Russia's rouble strengthened 2.1%, nearing a more-than-four-month high, while the currencies of major oil importers - Turkey and India - inched lower.

Israel's shekel was muted as the conflict with Hamas raged on. U.S. and Israeli officials said a deal to free some of the hostages held in Gaza was edging closer.

Currencies in eastern and central Europe, such as Hungary's forint and Czech's crown were little changed against the euro. Poland's zloty strengthened 0.4%.

Romania's leu inched 0.1% lower, ahead of the release of the local central bank's minutes of its monetary policy decision delivered earlier in the month.

(Reporting by Johann M Cherian in Bengaluru; Editing by Janane Venkatraman)