Zimbabwe to start using Chinese Currency. The People’s Bank of China and the Reserve Bank of Zimbabwe are investigating the feasibility of using the Chinese currency, renminbi or yuan under the multicurrency system.
In an interview with our source on Thursday, the central bank governor John Mangudya said the use of the yuan in Zimbabwe would help minimise the exchange rate losses between the two countries.
“It [yuan] is one of the currencies in the baskets of the multi-currencies and its usage is minimal, almost close to zero.
The People’s Bank of China and the Reserve Bank of Zimbabwe are investigating how to promote the usage of the renminbi or yuan under the multicurrency system,” Mangudya said.
He said the yuan would be promoted because of trade and investments that exists between the two countries and it was prudent to make sure that it was used alongside the United States dollar in Zimbabwe.
Mangudya said the usage of the yuan was dependent on underlying transaction levels of trade within the two countries and envisaged bilateral payments arrangement where goods from Zimbabwe to China would be paid in yuan and vice-versa.
He said there was need to increase production if the country was to benefit from the arrangement.
China and Zimbabwe’s annual bilateral trade rose to $1,24 billion in 2014 from $500 million in 2011.
This week Chinese President Xi Jinping visited Zimbabwe and 12 deals were signed with total investments worth $4 billion.
Economist Daniel Ndlela said the request by the Zimbabwe government for the construction of a Parliament building showed that the country had not set its priorities right as power and infrastructure should have been at the top of the list.
“Our development will not depend on mega deals from China but on ourselves. We have a lot to improve on ourselves,” Ndlela said.
The mega deals will be implemented next year and that means the country will have to wait a little bit more before they reach fruition.
Zimbabwe adopted the multi-currency system in 2009 after it experienced unprecedented hyperinflation.