In an effort to control the spiraling inflation that has severely devalued the local currency, Zimbabwe’s central bank will start selling gold coins this month.
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 Victoria Falls-inspired Mosi-oa-tunya currency may be exchanged for cash and used for both domestic and international 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 utilise 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 inflation in the southern African nation has increased pressure on a populace already experiencing shortages and brought back unpleasant memories of the economic disarray under Robert Mugabe’s almost four-decade leadership.
President Emmerson Mnangagwa’s efforts to revive the economy have been hampered by annual inflation, which reached about 192 percent in June.
In 2009, Zimbabwe gave up using its inflation-damaged currency and switched to using other currencies, mostly the US dollar. In 2019, the government brought back the local currency, however it has since fallen sharply in value.
Last week, The Central Bank of Zimbabwe said it fought hyperinflation by doubling its benchmark interest rate, which is now the highest in the world at 200 percent.
Fears of a return to the hyperinflationary period of 2008, when savings were completely wiped out, increased when annual inflation more than doubled in just two months to hit 191 percent in June.
After expressing “grave concern” about the recent spike in inflation, the bank’s governing body made the astronomical interest rate increase public in a statement.