GOLD COINS TO BE INTRODUCED BY ZIMBABWE AS LOCAL CURRENCY PLUNGES

Wed 06 July 2022:

Zimbabwe’s central bank said that it would begin selling gold coins this month as a form of reserve money to control the country’s out-of-control inflation, which has severely devalued the local currency.

The coins will be sold starting on July 25 in local currency, US dollars, and other foreign currencies at a price depending on the current global gold price and the cost of manufacturing, according to a statement from the governor of the central bank, John Mangudya, on Monday.

The “Mosi-oa-tunya” coin, named after Victoria falls, can be converted into cash and be traded locally and internationally, the central bank said.

The gold coin will contain one troy ounce of gold and will be sold by Fidelity Gold Refinery, Aurex, and local banks, it added.

International investors utilize gold coins as a form of insurance against inflation and conflict.

In an effort to promote confidence, Zimbabwe more than doubled its policy rate last week from 80% to 200% and outlined plans to declare the US dollar legal tender for the next five years.

Rising prices in the southern African nation have put additional strain on a population already dealing with shortages and brought back memories of the economic disarray that existed during veteran leader Robert Mugabe’s almost four-decade tenure in the past.

President Emmerson Mnangagwa’s efforts to revive the economy were hampered by annual inflation, which reached nearly 192% in June.

In 2009, Zimbabwe gave up using its inflation-damaged currency and switched to using other currencies, mostly the US dollar. In 2019, the government brought back the local currency, however it has since fallen sharply in value.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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