The Reserve Bank of Zimbabwe (RBZ) started selling gold coins today at R30 753.60 and has a local value of ZW$805 745.35, RBZ governor John Mangudya said.
The gold coins are the latest attempt by the RBZ to contain inflation and return confidence in the local currency while at the same time reducing the affinity for the US dollar on the black market.
“We are now providing the store of value, we are providing the gold coin. It’s a genuine coin. There is no need to go on the black market to go and buy the US$ to store value,” said Dr John Mangudya.
Meanwhile, with inflation soaring in Zimbabwe and the country’s currency in free fall as people abandon it for the U.S. dollar, the government of Zimbabwe is fighting back with a novel strategy: gold coins.
While gold is traditionally the ideal hedge against inflation and general economic uncertainty, no country has previously tried to tackle a weakening currency by selling gold coins. “In that sense, it is unusual,” said Carlos Caceres, the International Monetary Fund’s representative to Zimbabwe.
However, economic crises are nothing new to people in the southern African nation, who for more than two decades have faced hyperinflation, food and fuel shortages, staggering unemployment and other hardships.
Most of Zimbabwe’s inflationary pressures emanate from its currency troubles. But currently, rising prices are also being fueled by Russia’s invasion of Ukraine, which has sparked a global wave of inflation amid supply shortages of grains and fuel.