HARARE (Reuters) – Zimbabwe’s Reserve Bank has borrowed $985 million from African banks including Mozambique’s central bank and the African Export and Import Bank to purchase fuel and other critical imports, governor John Mangudya said.

Zimbabwe is in the grip of a severe dollar crunch and last month ditched a discredited 1:1 dollar peg for surrogate bond notes and electronic dollars, merging them into a lower-value transitional currency called the RTGS dollar.

Mangudya said the loans would be repaid from future gold earnings and had a tenure of between three and five years.

“These loans are well structured facilities contracted last year,” he told a parliamentary committee.

Mangudya also said government borrowing from the central bank reached $2.99 billion in December, about three times its permissible overdraft limit.

The government has promised to curb borrowing in 2019 as part of reforms to revive the southern African economy, after the budget deficit soared last year following a spike in spending ahead of elections.

Reporting by MacDonald Dzirutwe; Editing by Mark Heinrich