Zimbabwe introduces gold coins as local currency tumbles

The Governor and Chairman of Zimbabwe’s Central Bank John Mangudya announced the institution will sell gold coins, in addition to fiat local currency, in an attempt to cope with rising inflation.

Mangudya said in a statement that the coins will be available for sale starting July 25 in local currency, US dollars, and other foreign currencies, at a price based on the current market value of gold.

The gold coin has been named “Mosi-oa-tunya,” translating into “the smoke that thunders,” named after “Victoria falls” located on the southern bank of the Zambezi River, which said to be an important source of tourism for the country.

The gold coin can be converted into cash and traded both locally and internationally, the bank said.

The central bank added that these coins will contain one troy ounce of gold and will be sold by Fidelity Gold Refinery, Aurex, and other local banks.

Gold coins retain near full value regardless of either change of government’s currency value or being transported outside their country of origin, and they are used by investors internationally to hedge against inflation and wars.

Last week, Zimbabwe more than doubled its policy rate from 80% to 200% and outlined plans to make the US dollar legal tender for the next five years to boost confidence.

Soaring inflation in the southern African country has been piling pressure on a population already struggling with shortages of goods and stirring memories of economic chaos years ago, under veteran leader Robert Mugabe’s near four-decade rule.

Annual inflation, which hit almost 192% this June, cast a shadow over President Emmerson Mnangagwa’s bid to revitalize the economy.

Zimbabwe abandoned its inflation-ravaged dollar in 2009, opting instead to use foreign currencies, mostly the US dollar.

The southern African country re-introduced the local currency in 2019, which has rapidly lost value again.