Zimbabwe to start selling gold coins as local currency falters

July 05, 2022

Zimbabwe will start selling gold coins this month in a bid to tackle runaway inflation which has hamstrung the local currency.

Central bank governor John Mangudya announced the move on Monday amid economic woes in the southern African nation.

The gold "Mosi-oa-tunya" coins - named after Victoria Falls - will contain one troy ounce of gold (around 31 grams) and can be converted into cash and traded both locally and internationally, the central bank said.

Gold coins are used by investors globally to hedge against inflation and wars.

The new coins will be available for sale from 25 July in local currency, US dollars and other foreign currencies at a price based on the prevailing international price of gold and the cost of production.

It comes as the country's 15 million people struggle with shortages and soaring inflation, conjuring memories of economic chaos under Robert Mugabe's near four-decade rule.

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

Annual inflation hit almost 192% in June, casting a shadow over President Emmerson Mnangagwa's bid to revitalise the economy.

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

The country's government reintroduced the local currency in 2019, though it has rapidly plunged in value yet again.

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