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Zimbabwe’s central bank will start issuing gold coins as legal tender in late July. The cash-strapped country is battling soaring inflation, that has affected every segment of the population, besides weakening the local currency. Interestingly, the gold coin is named ‘Mosi-oa-Tunya’, a phrase equivalent to the Victoria Falls. The gold coin can be converted into cash.
Zimbabwe’s central bank will start issuing gold coins as legal tender in late July. The cash-strapped country is battling soaring inflation that has affected every segment of the population, besides weakening the local currency. Interestingly, the gold coin is named ‘Mosi-oa-Tunya’, a phrase equivalent to the Victoria Falls. The gold coin can be converted into cash.
The country’s inflation rate more than doubled last month to 191% ringing back memories of the hyperinflation of the 2000s. The Zimbabwean dollar was redenominated three times, but later in 2009, it was abandoned because of its instability. The local currency would later be abandoned in 2009.
The central bank said that the gold coins will be available for sale to the public in both local currency and US dollars and other foreign currencies at a price based on the prevailing international price of gold and the cost of production. The coins are expected to act as a ‘store of value and to reduce the demand for US dollars. The central bank policies have come under attack.
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Zimbabwean’s experience with the central bank’s policies is often of concern and uncertainty. Many Zimbabweans are known to have lost their savings including pensions when the Zimbabwean dollar crashed in 2009. The country mostly uses the US dollar despite attempts to revive the local currency. The central bank last week raised interest rates to 200% from 80% and has outlined plans to make the US dollar legal tender for the next five years.
