Forget the US dollar – Zimbabwe embraces the Chinese yuan as legal tender

Zimbabwe has announced that it will make the Chinese yuan legal tender in the country after Beijing said that it will cancel over R600 million of the country’s debt.

While the yuan has been in use in the country for some time, it was never officially sanctioned or approved for public transactions.

Zimbabwe abandoned its currency – the Zim dollar – in 2009, after hyperinflation peaked around 500 billion percent.

The country  went to using mainly US dollars, South African rands, and Botswana pula.

The currency was officially scrapped after it hit 35 quadrillion (that’s 35,000,000,000,000,000) Zim dollars against a single US dollar.

According to reports, making the yuan official, legal tender in the country will further Zimbabwe’s goals of tightening trade relations between it and China.

It will be mainly used as a function of trade, the Zim finance minister said – while the country is still negotiating on the exact amount of debt to be written off.

China is Zimbabwe’s biggest trading partner following Zimbabwe’s isolation by its former western trading partners over Harare’s human rights record.

Zimbabwean president Robert Mugabe has adopted a “look East policy”, forging relations with Asian nations, which has lead to the signing of various agreements, including infrastructure upgrades and energy projects.

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Forget the US dollar – Zimbabwe embraces the Chinese yuan as legal tender