China demands gold as collateral
Duncan Richardson, News Editor
9 May 2014, 10:32 a.m.
According to a Chinese government official, China wants Zimbabwe to use its mineral proceeds as collateral for any future loans. Zimbabwe’s Mines minister confirmed the two countries had discussed using various metals and minerals as collateral but concluded that gold is the most stable.
Chinese officials have defended their stance claiming, "It’s in accordance with rules and regulations when granting any loan, it doesn’t mean that we will use the collateral."
China has already extended nearly $1.5 billion to Zimbabwe over the last three years in an attempt to help support the African countries allying economy. Between 2007 and 2009 the Zimbabwe dollar lost more than 99.9% of its value as the country experienced one of the worst hyperinflations on record.