A man counts bond notes at a vegetable market in Harare. File picture: Philimon Bulawayo/Reuters

HARARE – Botswana has agreed to extend a 1 billion Pula (R1,340bn) credit line to Zimbabwe, Zimbabwe's finance minister Mthuli Ncube said Thursday. 

He told Xinhua on the sidelines of the inaugural session of the Botswana-Zimbabwe Bi-National Commission (BNC) in Harare that the details of the facility were still being worked out. 

"I cannot say much because the Presidents of the two countries are still working out the details but I can confirm that Botswana has agreed to extend a 1 billion Pula credit line to Zimbabwe," Mthuli Ncube said. 

 Earlier, Botswana President Mokgweetsi Masisi confirmed the monetary deal, saying his country had raised the facility from the initial 500 million Pula to 1 billion in response to a question during the BNC meeting. 

 Both Masisi and Ncube did not specify what the credit line will be used for. The announcement of the credit line came a day after the Botswana government on Wednesday denied media reports that it had extended a 600 million US dollars credit facility to Zimbabwe. 

Zimbabwe is currently facing a crippling foreign currency shortage that has affected the importation of essential commodities such as fuel and medical drugs. 

In a bid to tame the thriving foreign currency black market that has eroded currency value and competitiveness of the country's exports, the Reserve Bank of Zimbabwe last week introduced a foreign exchange inter-bank market where the local currency can be traded against the US dollar and other currencies at market rates. 

The local currency debuted at 2.50 against the US dollar last Friday, lower than black market rates of around 3.60.