Zimbabwe's political rivals returned to power-sharing talks on Wednesday with hopes growing of an agreement soon to end the political crisis.
In a sign of the economic decline that has been worsened by the deadlock between President Robert Mugabe and opposition leader Morgan Tsvangirai, the central bank said it would allow goods to be bought in foreign currency.
Mugabe and Tsvangirai said on Tuesday they had made progress and would address outstanding issues on Wednesday at talks mediated by South African President Thabo Mbeki.
A power-sharing deal would end two months of wrangling and help ease the crisis since Mugabe's re-election unopposed in June in a poll condemned around the world. Tsvangirai boycotted the vote over attacks on his supporters.
Zimbabweans want a leadership able to address inflation of over 11 million percent and severe food and fuel shortages that have driven millions across the country's borders, straining regional economies.
"We are optimistic, we are never pessimistic", a jovial-sounding Mugabe told reporters when he arrived for the talks at a Harare hotel.
Swaziland's foreign minister told Reuters that Mbeki -- mandated by regional grouping SADC to mediate an end to the crisis -- had told Swaziland's King Mswati III that he expects to end his mediation efforts by the end of the week.
A meeting of SADC's defence and security committee was postponed from Wednesday to give Mbeki time to deliver a final report on his mediation, Swaziland's Foreign Minister Mathendele Dlamini said.
A new round of talks began in Harare on Monday between Mugabe's ZANU-PF, Tsvangirai's MDC party and a breakaway MDC faction.
DEAL IN SIGHT?
Initially prospects looked bleak, but after several hours of meetings on Tuesday, the rivals appeared more hopeful.
"As you are aware these talks have been dragging on for some time now, but I must say that there is a positive development," Tsvangirai told reporters as he left the Harare hotel after hours of negotiation, without giving more details.
Mbeki had presented a proposal sharing executive powers, the main sticking point in the negotiations, the state-run Herald newspaper said. It also looked at structuring an all-inclusive government.
In a further sign of the government's desperation to contain the economy's collapse, Zimbabwe's central bank said it would license 1,000 retailers and 200 wholesalers to sell goods in foreign currency. Fuel can also be sold in foreign currency.
It was also an indication of the government's losing battle against the black market.
"We are doing this for an initial period of 18 months, as an experiment," Central bank Governor Gideon Gono told reporters.
The most used foreign currencies in Zimbabwe are the South African rand and the US dollar.
The central bank has repeatedly re-denominated the Zimbabwe dollar to try keep up with inflation. In its latest move it lopped off 10 zeros on Aug. 1 to help bring relief to consumers forced to carry large bags of money to buy everyday goods.
But while the official rate to the US dollar stands at 60, the black market rate has plunged to 2,000 to the greenback.