Zimbabwe to start selling gold coins as currency weakens

06 Jul 2022

Zimbabwe is due to start selling gold coins later this month in an attempt to curb soaring inflation which has weakened the local currency.

On Monday, the governor of the Reserve Bank of Zimbabwe John Mangudya said the gold coins will be available for sale from 25th July in local currency, U.S. Dollars and other currencies. The price will be based on the current gold price and production costs.

The central bank said the so-called "Mosi-oa-tunya" gold coins, named after Victoria Falls, can be converted into cash and traded domestically and internationally, Sky News reports.

The gold coin will contain one troy ounce of gold, the bank went on to say.

The move comes as Zimbabwe’s 15 million population grapples with skyrocketing inflation and shortages.

Last week the country increased its policy rate by more than double, from 80% to 200%, and detailed plans to make the Dollar legal tender in Zimbabwe for the coming five years to bolster confidence.

Annual inflation in the country, which reached almost 192% last month, has cast a shadow over President Emmerson Mnangagwa’s attempts to revive the economy.

Zimbabwe ditched its inflation-ravaged dollar back in 2009, Reuters reports, deciding instead to use foreign currencies, predominantly the U.S. Dollar. The local currency was reintroduced by the government in 2019, but it has swiftly again lost value.

However, the move has sparked mixed views from Zimbabweans, reports The Guardian.

“I cannot trust the central bank to give me a coin while they hold my cash,” said Evans Mupachikwa, a foreign currency trader. “Zimbabwe is known for policy inconsistencies. What if they wake up and say the coins are no longer tradable?”

Whereas Munesu Mandiopera, another foreign currency trader stated: “Gold is expensive. I do not think many of us will afford to buy the coins. Many will continue to keep their money at home. This is another failed move by the government.”