The country of Zimbabwe seems to be going in a free slide decline that the President Mugabe cannot do anything to halt. First it was the mass hunger strike which the government did its best to cover and deny. Then it was the ailing health of the president caused mostly by the fact that age is catching up to him. Now it seems like the economy cannot survive another minute using their old currency the Zimbabwean dollar which was said to have been demonetized due to the economic challenges which the country cannot seem to rise out of.
The official announcement came yesterday when Zimbabwe 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. Even though the Chinese yuan had been used in the country for transactions, it was never sanctioned or officially approved for legal public transactions.
The decision to abandon the Zimbabwean dollar was made in 2009 after hyperinflation peaked around 500 billion percent. For this reason, the country had diverted to using US dollars, South African rand and Botswana pula as a substitute while deliberations were made on how to go about getting a nationally acceptable legal tender.
In essence, the Zim dollar 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.
Zim finance minister said it will be mainly used as a function of trade while the country negotiates to increase the 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 led to the signing of various agreements, including infrastructure upgrades and energy projects.
The reaction to the announcement has been mixed feelings amongst citizens who desperately hope that the move will bring development to the economy and reduce the suffering of the masses.