Zimbabwe Is Now Issuing Gold Coins
Zimbabwe Is Now Issuing Gold Coins
Inflation is so bad in Zimbabwe that the country is now issuing gold coins to its citizens
Tristan Bove Wed, July 6, 2022 at 12:45 PM
As a global inflationary wave continues to send costs soaring for everything from fuel to groceries, some governments are getting creative in reining in prices.
Zimbabwe, a country of less than 15 million people in southern Africa, will begin issuing gold coins to its citizens as a hedge against inflation later this month, the country’s central bank announced this week.
The gold coins will be introduced as a “store of value,” according to a statement by the central bank governor John Mangudya, meaning that Zimbabweans can exchange them in the future without worrying about the coins deteriorating in value as has happened with the local Zimbabwean dollar, which has been devalued by over 40% since the beginning of the year. They will be available to the public starting on July 25, and will be sold “based on the prevailing international price of gold and the cost of production.”
The public will be able to buy gold coins using both Zimbabwean dollars as well as the U.S. dollar, and other foreign currencies. The Zimbabwean dollar is the official currency in the country, but the U.S. dollar and other foreign currencies were considered legal tender between 2009 and 2019, and the greenback is still widely used and accepted.
Buyers can either hold on to the coins or place them in the custody of a bank. Holders can trade the coins for cash at any point, although Mangudya’s statement says that the coin can “also be used for transactional purposes.”
The gold coin’s introduction comes as the Zimbabwe central bank attempts to control soaring inflation in the country, where the annual rate hit 192% last month. Ever since the 1970s, gold has been one of the most popular commodities used to hedge against inflation and war, as the metal tends to rise in value as the purchasing power of currencies decline, although this is the first time Zimbabwe has turned to the commodity as a potential currency replacement.
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