Zimbabwe “shows confidence” by adopting yuan as currency, China says

Zimbabwe’s recently announced plan to adopt the yuan as legal tender shows the African country’s “confidence” in China, Chinese Foreign Ministry spokesman Hong Lei said in a press conference Wednesday.

In response to the measure, presented by Zimbabwean Finance Minister Patrick Chinamasa, Lei said China would expand cooperation with Zimbabwe in various fields and help it develop.

The African country, suffering from persistent hyperinflation, withdrew the Zimbabwean dollar as legal tender about six months ago and offered an exchange rate where 175,000 trillion of its currency was equal to just five U.S. dollars.

Since 2009, it has been legal to make payments using other currencies that were already widely used on the black market, such as the U.S. dollar, euro, pound and even currencies from neighboring South Africa and Botswana.

The adoption of the yuan as legal tender in Zimbabwe is part of the country’s agreement with China after the latter cancelled Zimbabwean debt totaling $40 million, analysts said.

In recent years, China has been calling for the yuan to be accorded the same acceptance at the global level as the U.S. dollar and the euro.

On Nov. 13, the International Monetary Fund’s managing director, Christine Lagarde, said in a statement that experts at the multilateral organization had given the green light for the yuan’s inclusion in the basket of currencies, which includes the U.S. dollar, euro, Japanese yen and British pound.