At lease 25,188 gold coins released by the Reserve Bank of Zimbabwe in 2022 have been sold between July 2022 and January 13 2023, the bank’s Governor has said in a policy statement.
The gold coins were introduced in July 2022 as the government’s solution for people in the country to store value as inflation runs rampant in the economy. Besides being a store of value to stabilize the nation’s tumbling exchange rate, the coins were also an alternative to the US dollar which is in high demand.
Reserve Bank of Zimbabwe 🇿🇼 Governor, John Mangudya, holds a sample of a gold coin at the launch in Harare, Monday, July 25, 2022https://t.co/tPrEJUV3Gi pic.twitter.com/8clZelVKzP
— BitKE (@BitcoinKE) March 16, 2023
Month-on-Month inflation fell from a high of 30.74% in June 2022 to 1.1% in January 2023, the country’s Statistics office said. But the 230% inflation rate remains one of the highest in the world.
🇿🇼Month-on-Month inflation fell from a high of 30.74% in June 2022 to 1.1% in January 2023 since the introduction of gold coins, said the Zimbabwe Statistics office pic.twitter.com/AabEcJgjDz
— BitKE (@BitcoinKE) March 16, 2023
Between July 2022 and January 13, 2023, the Zimbabwean central bank sold 25,188 “Mosi-oa-Tunya” gold coins valued at over $28 million ($20 billion in ZWD), with 84% of the purchases made by corporates and 16% by individuals.
While the coins were initially targeting wealthier customers, lower denomination gold coins introduced in November 2022 ‘accounted for 38% of all sales,’ the bank said.
“The coins have proved to be an effective open market instrument for mopping up excess liquidity in the economy and a retail investment product for preserving value for investable funds,” said the bank’s Governor, John Mangudya.
The coins, which have a 180-day vesting period, along with the high-interest rate policy, helped stabilize inflation and the local currency’s exchange rate versus the US dollar, according to the RBZ Governor.
On the other hand, in September 2022, the International Monetary Fund (IMF) urged Zimbabwe to boost its own gold reserves instead of selling gold coins.
“The sale of gold coins has contributed to withdrawing Zimbabwe dollar liquidity from the market, though it represents an opportunity cost in terms of foregone reserves for the Reserve Bank of Zimbabwe,” according to an IMF spokesperson quoted by Bloomberg.
The bank ‘will continue to avail gold coins on a demand-driven basis as it seeks to promote a savings culture,’ said Governor Mangudya in his 2023 policy statement.
_______________________________________
Follow us on Twitter for the latest posts and updates
Join and interact with our Telegram community
_______________________________________
_______________________________________
