Government has signed a landmark currency swap deal with the People’s Republic of China that is set increase trade between the two countries and reduce the use of scarce foreign currency resources.
The currency swap deal is the indication of strong bilateral relations between the two countries.
Speaking at State House after Chinese Foreign Minister Wang yi’s courtesy call on President Emmerson Mnangagwa this Monday, Finance and Economic Development Minister Professor Mthuli Ncube said the deal allows Zimbabwe companies to source the renminbi from local banks to import raw materials from China
“What this deal entails is that Chinese companies willing to invest in Zimbabwe will get the local currency for their foreign currency investment then their foreign currency will be used to pay those Chinese companies to exit or repatriate their earnings to China,” said the Chinese Foreign Minister Wangyi.
A currency deal eases the use of scarce foreign currency in international trade and with trade between Zimbabwe and China increasing in recent years, it will go a long way in creating the much needed foreign currency reserves at the central bank.
China has in recent years signed currency swaps with several emerging markets, including South Africa and Nigeria.