Zimbabwe has announced that it will make the Chinese yuan
legal tender after Beijing confirmed it would cancel $40m in debts, AFP
reports.
"They [China] said they are cancelling our debts that
are maturing this year and we are in the process of finalising the debt
instruments and calculating the debts," Minister Patrick Chinamasa said in
a statement.
Chinamasa also announced that Zimbabwe will officially make the Chinese yuan legal tender as it seeks to increase trade with Beijing. Zimbabwe abandoned its own dollar in 2009 after hyperinflation, which had peaked at around 500bn%, rendered it unusable.
Chinamasa also announced that Zimbabwe will officially make the Chinese yuan legal tender as it seeks to increase trade with Beijing. Zimbabwe abandoned its own dollar in 2009 after hyperinflation, which had peaked at around 500bn%, rendered it unusable.
It then started using a slew of foreign currencies,
including the US dollar and the South African rand. The yuan was later added to
the basket of the foreign currencies, but its use had not been approved yet for
public transactions in the market dominated by the greenback.
Use of the yuan "will be a function of trade between
China and Zimbabwe and acceptability with customers in Zimbabwe," the
minister added.
Zimbabwe’s central bank chief John Mangudya was in
negotiations with the People’s Bank of China "to see whether we can
enhance its usage here," said Chinamasa.
China is Zimbabwe’s biggest trading partner following
Zimbabwe’s isolation by its former western trading partners over Harare’s human
rights record.
In early December,Chine presient Xi Jinping stopped over in
Zimbabwe in a rare trip by a world leader to the country, and presided over the
signing of various agreements, mainly to upgrade and rebuild Zimbabwe’s
infrastructure such as power stations.
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