Zimbabwe To Mint Gold Coins To Control Inflation

| Updated: July 6, 2022 3:39 pm

The Reserve Bank of Zimbabwe will soon start selling gold coins this month as a store of value to tame inflation. RBZ Guv John Mangudya issued a statement, Monday, stating that the coins will be available for sale onwards July 25 in local currency, U.S. dollars and other foreign currencies at a price based on the prevailing international price of gold and the cost of production.

It will be called the “Mosi-oa-Tunya Gold Coin”, which means “The Smoke Which Thunders,” a reference to Victoria Falls that is located on the border between Zimbabwe and Zambia. The move is being aimed at curbing soaring inflation amid a slump in its currency. The country’s central bank also outlined plans to make the US dollar legal tender for the next five years. The central bank’s main interest rate was more than doubled this month to 200%, after the annual rate of inflation rose above 190%.

Zimbabwe’s dollar has slumped in value against major currencies this year. The gold coins will contain one troy ounce of 22-carat gold. A troy ounce is a unit of measure used for weighing precious metal – such as gold, silver and platinum – that dates back to the Middle Ages. One troy ounce is equal to 31.10g.

His statement also noted that each coin will be identified with a serial number and can be easily converted to cash, locally and internationally. Last month, the annual rate of inflation hit 191.6%, while the Zimbabwean dollar has lost more than two-thirds of its value against the US dollar since the start of 2022.

Soaring inflation has piled pressure on President Emmerson Mnangagwa in a country that still remembers the economic chaos under Robert Mugabe’s almost four decades of rule.

It may be recalled that hyperinflation forced the country to abandon the Zimbabwe dollar in 2009, and it opted instead to use foreign currencies, mainly the US dollar. During the worst of the crisis the government stopped publishing official inflation figures but one estimate put the inflation rate at 89.7 sextillion percent year-on-year in mid-November 2008.

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