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Zimbabwe-China currency swap

Zimbabwe signed a currency swap deal with China, hoping to stabilise its economy and improve trade.

Mthuli Ncube, Zimbabwe’s Finance Minister met with Chinese Foreign Minister Wang Yi during his five-country Africa tour recently where he said the country was following in the steps of Japan, Nigeria and South Africa.

“What this means is that there are those who will be investing in Zimbabwe from China. Those who require their proceeds to be remitted back to China can now do so,” he said.

A currency swap involves the exchange of principal and interest in different currencies. The purpose of a currency swap is to reduce the cost of borrowing a foreign currency. Mr. Ncube said the currency swap will help Chinese investors in bringing in fresh capital into Zimbabwe.  “The idea is that those individuals will then swap currency so that those who are investing in Zimbabwe are able to …