Zimbabwe
has announced that it will make the Chinese yuan legal tender after Beijing
confirmed it would cancel $40m in debts.
“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.
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 said.
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