The central bank of Zimbabwe on the 25th of July 2022, will legalize the issuing of gold coins to suppress the high rate of inflation crisis faced by the country which is considered to weaken its local currency.
According to Apex bank, the “gold coin” with the name ‘Mosi-oa-Tunya’ which means “smoke that thunders” is about victory falls, the world’s largest sheet of falling water will be converted into cash and offered in place of the US dollars.
Reason For Introducing Gold Coin
It is the latest and only measure the country can take to face its devastating economic downfall. In the last month, Zimbabwe’s inflation rate has doubled to 191% taking the memory lane to the hyperinflation of the 2000s, which resulted in the Zimbabwean dollar dominating in 2009.
The governor of Zimbabwe’s central bank, John Mangudya, on Monday said the gold will be available for sale to the Zimbabwe citizens in their local currency, dollars, and other foreign currencies. It will be based on the international price for gold with the cost of production.
According to him, the coin will serve as a store of value to reduce the high demand for US dollars. Considering the rate gold increases, it is an investment asset for the country.
Outburst From Zimbabwean Citizens
However, the Zimbabwean citizens have expressed their utmost shock and sad feeling hearing the news. Speaking with our newsagents, some citizens said their relationship with the central bank’s policies is always a thing of concern and uncertainty.
A foreign currency trader, Evans Mupachikwa, says “I can not trust the central bank to give me a coin while they hold my cash. What if they wake up to say the coins are no longer tradeable?.” Many citizens claimed to be penniless since the dollar crash in 2009.
Following the southern African tradition, the Zimbabwe government attempted to restore its currency to the US dollar in 2019. The Zimbabwe dollar was in use but later fell in value.