For 14 years, Zimbabwe has not had its own currency because of the hyperinflation that ruined the country. Since then, it had resorted to the US dollar, which was linked to its monetary system. But with the aim of boosting confidence in the local currency and controlling the rampant inflation that has further destroyed the country’s volatile currency, the Reserve Bank of Zimbabwe announced on Monday 25 July 2022 the sale of gold coins from the mines to the public.
In Zimbabwe, the government has proposed the sale of gold at international prices since Monday 25 July. A measure announced by the Reserve Bank of Zimbabwe to boost confidence in the local currency. Indeed, the hyperinflation of 2008 led to the destruction of the national economy and the population lost confidence in the local currency, which became very fragile.
A distant memory, but still strong in the memories.
The disastrous inflation of 2008 is far from being forgotten. Many Zimbabweans now prefer to fight on the illegal market for the few US dollars they can keep at home as savings or for their various daily transactions. This is because many retailers have a habit of rejecting Zimbabwean currency due to lack of confidence.
2000 gold coins distributed to commercial banks in the first phase.
Faced with this situation, the government therefore relied on the sale of gold coins to correct this situation. “We are giving them an alternative product to invest in instead of going to the parallel market to look for a US dollar reserve,” says John Mangudya, the Governor of the Reserve Bank of Zimbabwe. The Central Bank distributed 2,000 coins to commercial banks. The Governor of the Reserve Bank of Zimbabwe, John Mangudya, has therefore reassured that the coins can be used for purchases in shops, depending on whether the shop has enough coins.
A conditional sale.
The Zimbabwean gold coins are valued at USD 1 824 each with a purity of 22 carats. They can be purchased by any person or business at authorised outlets, such as banks. The purchaser may keep them in a bank or take them home. Foreigners can only buy the coins in foreign currency. Those holding the coins will only be able to exchange them for cash 180 days after the purchase date.
As a reminder, Zimbabwe has large gold deposits and exports of this precious metal are one of the main sources of foreign exchange for this southern African country. Gold production has improved to around 30 tonnes in 2021, up from 19 tonnes in 2020, according to official figures.
Charbel Ahouandjinou(stag)
