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” currency, which bears the name of Victoria Falls, can be exchanged for cash and used for both domestic and foreign trade, according to the central bank.
According to the statement, local banks, Aurex, and Fidelity Gold Refinery would all sell the one troy ounce gold coin.
International investors utilize gold coins as a form of insurance against inflation and conflict.
In an effort to promote confidence, Zimbabwe announced plans last week to make the US dollar legal tender for the next five years, more than tripling its policy rate from 80 to 200 percent.
Rising prices in the southern African nation have put additional strain on a populace 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 about 192 percent in June.
In 2009, Zimbabwe chose to utilize foreign currencies, mostly the US dollar, in place of its inflation-ravaged currency. In 2019, the government brought back the local currency, however it has since fallen sharply in value.
