31 C
Colombo

Zimbabwe to introduce gold coins as local currency tumbles

Published:

Zimbabwe’s central bank announced this month that it will begin selling gold coins as a store of value to combat runaway inflation, which has significantly weakened the local currency.

According to the central bank governor, John Mangudya, the coins will be available for purchase on July 25 in local currency, US dollars, and other foreign currencies at a price based on the current international price of gold and the cost of production.

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.

Gold coins are used by investors internationally to hedge against inflation and wars.

Zimbabwe increased its policy rate from 80 percent to 200 percent last week and announced plans to make the US dollar legal tender for the next five years in order to boost confidence.

Soaring inflation in the southern African country has added to the pressure on a population already suffering from scarcity and rekindled memories of economic chaos under veteran leader Robert Mugabe’s nearly four-decade rule.

Annual inflation reached nearly 192 percent in June, casting a pall over President Emmerson Mnangagwa’s efforts to revitalize the economy.

Zimbabwe abandoned its depreciated dollar in 2009, preferring to use foreign currencies, primarily the US dollar. The local currency was reintroduced by the government in 2019, but it quickly lost value.

Related articles

Recent articles