Zimbabwe will this week introduce a gold coin aimed at battling a resurgence in inflation and easing the public’s thirst for US dollars.
The 22-carat coins, each weighing one Troy ounce (31.1 grammes) and individually numbered, have been named Mosi-oa-Tunya (“the smoke that thunders”) after the country’s world-famous Victoria Falls.
They will be sold through banks from Monday at the prevailing international price for gold. The coin — whose market value on Friday was $1,725 — will be convertible to cash and be tradeable locally and internationally.
Buyers will take physical possession of the coin and be issued with a certificate of ownership, with the option of placing the asset in the safety of a bank vault.
The government says the innovation aims at shoring up the economy at a time of galloping inflation and depreciation of the Zimbabwean dollar.
Instead of people going to the parallel market to look for a store value (in the US dollar), we are giving them an alternative product they can invest in,” the governor of the Reserve Bank of Zimbabwe, John Mangudya.
He told lawmakers that if the parallel currency market steadied, “money will have value and result in stable prices.”
The number of coins that will be minted has not been disclosed. Zimbabwe is a major source of gold, and they will be made from locally mined ore.
Inflation rose to 191.60 per cent in June, the highest official rate in the world, according to Steve Hanke, a professor of applied economics at Johns Hopkins University in Maryland.
Confidence in the local dollar is so low that goods and services are mostly priced in greenbacks.