The Reserve Bank of Zimbabwe on Friday revealed images of gold coins that the country aims to use in combating inflation.
The banking regulator in Zimbabwe indicated that the inflationary pressure in the country has weakened the local currency. As an attempt to remedy the worsening situation the bank indicated that they would rely on the sale of gold coins as a way to store their value.
The term ‘Mosi-oa-Tunya’ has been used to refer to the gold coins. The coins are named after Victoria Falls which is considered the largest waterfall situated between Zambia and Zimbabwe. Further, the Southern Africa Nation’s Central Bank announced that the coins would be made available to the public starting from 25th July this year.
These efforts are not unfamiliar as banks all over the world are looking for various ways to combat the rising rates of inflation. The Zimbabwean dollar registered a decrease due to inflation by almost 200 percent. This means that the policy rate moved from 80 percent to 200. These efforts by the government of Zimbabwe are geared toward breaking the demand for the local dollar.
The gold coins are to be sold both locally and internationally because they can be converted into cash. One cold contain is set to have one troy ounce of gold and will be sold by local banks, including the Fidelity Gold Refinery, and Aurex. The move is not new since gold coins have long been used by investors to fight against inflations and wars.
Central Bank of Zimbabwe Long Fight on Currency Stability.
The history of the Zimbabwean dollar can be traced back to the year 2009 when the government decided to abandon its dollar due to inflation and adopted the use of foreign currencies such as the US dollar. Later on, the government went back to using the Zimbabwean dollar in 2019 though it is clear that it has once again lost its value. Concerns have been raised by workers in the country who wish to be paid in US dollars.
The inflationary pressure in the country and all over the world is causing food shortages and economic chaos for the larger population. The annual inflation in the country has raised to alarming rates hence the need to rely on the unveiled gold coins.