Zimbabwe’s central bank has announced that it will begin selling gold coins this month as a valuable store to curb runaway inflation, which has caused the local currency to fall sharply. Central bank governor John Mangudya said in a statement on Monday that the coins will be sold in local currency, U.S.dollars, and other foreign currencies from July 25, at prices based on prevailing international gold prices and production costs.
The ‘Mosi-oa-tunya’ coin, named after Victoria falls, can be exchanged for cash and traded locally and internationally, the central bank said. The gold coin will contain one troy ounce of gold and will be sold by Fidelity Gold Refinery, Aurex and local banks. Gold coins are used by international investors as a hedge against inflation and war. Last week, Zimbabwe more than doubled its policy rate from 80% to 200% and outlined plans to make the dollar legal tender over the next five years to boost confidence.
The high inflation in southern Africa is putting a lot of pressure on a population already struggling with shortages and making people remember the economic chaos years ago under veteran leader Robert Mugabe’s rule. Annual inflation, which hit nearly 192% in June, has cast a shadow over President Emmerson Mnangagwa’s drive to revive the economy.Zimbabwe abandoned its inflation-ravaged dollar in 2009, opting instead to use a foreign currency, mainly the US dollar. In 2019, the government reintroduced the local currency. However, it quickly became devalued again.