Zimbabwe’s Central Bank last Wednesday announced that the Chinese Yuan and three other Asian currencies will now be accepted as legal tender following improved economic relations.
Currencies including the Yuan, Australian dollar, Indian rupees and Japanese yen can now be used for local transactions as well international trading, said Charity Dhliwayo, acting governor of the Reserve Bank of Zimbabwe.
“Trade and investment ties between Zimbabwe, China, India, Japan and Australia have grown appreciably,” Dhliwayo was quoted by South Africa’s Business Day.
A sustained period of hyperinflation led to significant undervaluing of the Zimbabwean dollar, forcing the southern African country to discard its valueless currency in April, 2009 after several failed attempts to control inflation.
It has subsequently accepted the US dollar and the South African rand as legal currencies, which has reported helped stabilize the economy.
Chris Mugaga, an independent economist who spoke to Business Day, said the move was politically driven rather than economically motivated, given the strained relationship between Zimbabwe and the West following President Robert Mugagbe’s policy to seize farm lands from white owners.