Zimbabwe to introduce gold coins, hikes interest rates
RESERVE Bank of Zimbabwe (RBZ) says it will be introducing gold coins as part of measures to ensure investors and the general public have alternative means to preserve value, cushioning them from the negative impact of resurgent inflation in the economy.
According to RBZ the “gold coins” that will be minted at the Fidelity Gold Refineries, “will be available through normal banking channels.
Gold is considered a safe haven against inflation and a gold coin is made mostly or entirely of gold, while most gold bullion coins are pure gold.
Studies show that gold has outperformed the inflation rate and reduced the risk by a considerable margin.
Most gold coins minted are 90–92 percent gold (22 karat).
Popular bullion coins include the American eagle, the Canadian Maple Leaf, the South African Krugerrand, the Isle of Man Gold Cat, the Australian Kangaroo, and the China Mint Panda Bear.
The proposition has the potential to have a stabilisation effect on the economy if conducted properly given the stability and value storage associated with gold.
Zimbabwe’s inflation increased to 191,6 percent and 30,7 percent on a year-on-year and month-on-month basis for June 2022 respectively which is far astride from government projections of achieving 30 percent inflation rate by end of year.
In a statement this morning, RBZ Governor Dr John Mangudya said the Monetary Policy Committee (MPC) had noted the increase in inflation with concern as it was stifling consumer demand and confidence, an undesirable position that has the potential to derail economic strides attained in the economy over the past two years.
