Zimbabwe to sell gold coins as local currency weakens

Zimbabwe will begin selling gold coins as a store of value this month as its currency weakens significantly and the cost of living becomes unaffordable for many.

Fed Governor John Mangudya said the coins would be available by July 25 Available in local currency and US dollars at a price based on the prevailing price of gold.

The gold coins known as Mosi-oa-Tunya are named after Victoria Falls and can be converted into cash and sold locally and internationally become.

Dr. Mangudya said the gold coins would ease free market pressures on the US dollar, which authorities blame for the devaluation of the Zimbabwe dollar.

p>

“As you know, has been the US dollar is mainly used for two things; for importing goods and as a store of value,” he said.

“Gold coins offer an alternative investment opportunity to the US dollar as a store of value.”

The central bank governor said that investors, who buy gold coins will be able to preserve the value and make good profits when the price of gold goes up. He said the coins would contain one troy ounce of gold and would be sold through normal banking channels.

“Gimmick of extraction”

However, Finance Minister Tendai Biti said the gold coin would “not solve the structural crises arising from the collapse of exchange rates, excess money, inflation and unemployment” that characterize Zimbabwe’s economy.

“Instead, it is another ploy of extraction and arbitrage.

“They never tire of transferring wealth from the poor,” said Mr. Biti, who headed the Treasury when Zimbabwe adopted the dollar in 2009 at the height of hyperinflation.

“The Zimbabwe dollar is due to, among other things, the lack of reserves and the lack of anything to back it up.

“It therefore makes no sense to sell gold unless it is used to support the tattered currency < /p>

“The sale of gold, particularly in local currency, allows cartels with billions of Zimbabwe dollars to back the same thing with gold in the same way they have been selling US dollars on the black market.

“It also allows some foreign crooks to launder their money in Zimbabwe through gold coins.”

Zimbabwe last week more than doubled interest rates by 200 percent from 80 percent and announced plans to legalize the US dollar over the next five years currency to restore confidence in the economy.

Rising inflation in the South African country has pushed up the cost of living sharply Zimbabwe’s National Statistics Office said annual inflation in June rose to 191.7 percent, compared to 131.7 percent in May.

Read: Zimbabweans get cheaper food from abroad

The local currency, the 2019 after a decade of When dollarization was reinstated, it has rapidly depreciated against the US dollar, causing unrest among the country’s workforce as workers demand to be paid in foreign currency.

Read :Zimbabwe’s health workers, teachers reject 100 percent pay rise