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Reverse Bank in Harare, Zimbabwe (2019): Gold coins are said to help the country fight inflation
Photo: PHILIMON BULAWAYO / REUTERS
Zimbabwe reacted to currency turbulence and high inflation by introducing gold coins.
The central bank of the southern African country plans to start selling gold coins as a store of value later this month.
From July 25, they will be sold in local currency, dollars and other foreign currencies at a price based on the current international price of gold and production costs, according to central bank governor John Mangudya.
The "Mosi-oa-tunya" coin - named after the Victoria Falls - can be exchanged for cash and traded domestically and internationally, according to the central bank.
interest rate at 200 percent
Like the South African Krugerrand, the coin will contain one troy ounce of gold and will be sold by local banks, among others.
Gold coins are used by international investors to protect against inflation and risks such as wars.
Zimbabwe had abandoned its native dollar in 2009 - opting instead to use foreign currencies, most notably the US dollar.
In 2019, the government reintroduced the national currency.
However, this quickly lost value again.
The central bank plans to make the US dollar legal tender in the next five years – this should boost confidence in the country's economic development.
Zimbabwe's central bank more than doubled interest rates last week from 80 to 200 percent.
The reason for this is the enormous increase in the cost of living.
The inflation rate climbed to almost 192 percent in June.
That casts a shadow over President Emmerson Mnangagwa's attempt to restart the economy.
The rapidly rising inflation in Zimbabwe is affecting the population, who are already struggling with bottlenecks.
This brings back memories of the economic chaos that prevailed years ago under the nearly four-decade rule of longtime ruler Robert Mugabe.
ani/Reuters
