Zimbabwe
has announced that it will make the Chinese yuan its official legal
tender after Beijing confirmed it would cancel $40 million in debts.
 |
President Xi Jinping
visited Zimbabwe President Robert
Mugabe
|
Zimbabwe plans to make the Chinese yuan legal tender in a deal that
will result in $S40 million ($55 million) of debt being cancelled.
The southern African nation abandoned its own dollar in 2009 after
hyperinflation which peaked at around 500 billion% 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, but its use had not been approved yet for
public transactions in the market dominated by the US dollar.
The country's Finance Minister Patrick Chinamasa said the use of the yuan "will be a function of trade between China and Zimbabwe and acceptability with customers in Zimbabwe.
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."
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", the Minister said.
China is Zimbabwe's biggest trading partner following Zimbabwe's
isolation by its former Western trading partners over Harare's human
rights record.
In reaction veteran President, Robert Mugabe adopted a "look East policy", forging new alliances with eastern Asian countries and buttressing existing ones.
In early December, Chinese President 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.
Source: AFP
When News Breaks Out, We Break In. (The 2014 Bloggies Finalist)
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