Zimbabwe, China in currency swap deal

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Zimbabwe’s minister of Finance and Economic development professor Mthuli Ncube has announced that Zimbabwe has entered into a currency swap arrangement with China.

The currency swap will see Chinese investors who wish to bring foreign exchange into Zimbabwe as investment doing business with Chinese investors who are already in Zimbabwe and wish to send money out of the country to pay dividends or even to pay suppliers.

A swap agreement will allow the investor in China to pay the Chinese investor in Zimbabwe who is looking for foreign exchange while the Chinese investor in Zimbabwe would then release the Zimbabwe dollar equivalent of the US dollar to the local bank account of the payer in China.

 A currency swap, of US dollars for Zimbabwe dollars, will be done with the approval of the Reserve Bank of Zimbabwe and the Ministry of Finance.

The move is expected to boostinter country trade and investment between China and Zimbabwe.

“We have entered into a currency swap arrangement, what this means is that there are those who would be investing in Zimbabwe from China and those who require their proceeds to be remitted back to China which is normal. So, the idea is those individuals will then swap (currency) so that those who are investing in Zimbabwe are able to give them a domestic currency and they use the foreign currency which they are bringing in for investment to pay those who are exiting,” said Ncube.