Zimbabwe’s central bank has launched its gold coin currency in a bid to combat rising inflation, following a slump in the Zimbabwe dollar.
The central bank’s main interest rate more than doubled in July, reaching 200%, following annual rates of inflation rising above 190%.
A single gold coin from the bank will be priced at the international market rate for an ounce of gold with an added 5% to cover the cost of production.
On Monday an ounce of gold was priced at R30,700.
Governor of the Reserve Bank of Zimbabwe, John Mangudya, said the coin could be used in retail shops that had enough change.
“We are now providing the store of value; we are providing the gold coin. It’s a genuine coin. There is no need to go on the black market to go and buy the US dollar to store value,” he added.
The coin has been named “Mosi-oa-Tunya” which translates to “The Smoke Which Thunders”, referring to Victoria Falls, which borders Zimbabwe and Zambia.
The coins, each individually numbered and each weighing 31 grams, are being mined from local ore. Each coin has a purity rate of 22 carats.
The first batch of 2,000 coins will be dispatched through the reserve banks.
Anyone buying the coin can only trade it for cash after it’s been held for at least 180 days.
Zimbabwe’s dollar suffered a major slump against major currencies this year, causing inflation to soar.
“The government is trying to moderate the very high demand for the US dollar because this high demand is not being matched by supply,” Zimbabwean economist Prosper Chitambara told Sky News.
“For the common man, there is not really much to benefit directly from this, especially if you don’t have any excess cash. Many people have no money for bread, let alone for savings,” he added.
Opposition party the Citizens Coalition for Change said the idea would gain little trust from the public.
“The public will once again be at the mercy of arbitrary rules imposed by the monetary authorities,” Fadzayi Mahere, the party’s spokeswoman told The Times.
Image source: @SkyNews