Corporates buy bulk of distributed gold coins

Nqobile Bhebhe, Senior Business Reporter
THE Reserve Bank of Zimbabwe (RBZ) has minted a cumulative total of 10 000 Mosi-oa-Tunya gold coins while 6 799 gold coins had been sold out as of last Friday from 8 0 76 distributed by various agents.

Corporates are buying the bulk of the coins, which have attracted a huge market response and are a solid store of value and savings, RBZ governor, Dr John Mangudya has said.

“As at 26 August, a cumulative total of 10 000 gold coins had been minted and out of which 8 076 gold coins had been distributed to the banks agents for sale,” he said in a latest report following a recent Monetary Policy Committee meeting.

“A total of 6 799 gold coins had been sold out as at 26 August 2022 with 75 percent having been bought by corporates and 25 percent by individuals. 95 percent of the gold coins were purchased in local currency and the balance in foreign currency,” said Dr Mangudya.

Yesterday, each gold coin was pegged at ZWL$1 018 828 or US$1 838.

A gold coin which was unveiled by the Reserve Bank of Zimbabwe Governor Dr John Mangudya during a Press conference in Harare recently

In November, the smallest coin, containing just over 3,11g of gold will be introduced to the market and would cost US$188,48, or local currency equivalent at the interbank rate.

The Reserve Bank introduced the coins to help cushion corporates and individuals from the negative impact of declining cash values and mop up large sums of Zimbabwe dollars sloshing around in some bank accounts of corporates and wealthy individuals.

Local banks are temporarily not allowed to buy the gold coins for their own portfolios until the RBZ decides otherwise in line with developments in the economy.

Banks can only receive the coins from the Reserve Bank for onward selling to their customers on behalf of the apex bank.

Meanwhile, the monetary committee, noted a decline in month-on-month inflation from 25,6 percent in July to 12,4 percent in August and said it expects the trend to progressively decline while annual inflation is expected to continue rising to reach an annual peak in September.

“On the back of a tight monetary policy stance by the bank, the official and parallel market foreign exchange rates were expected to converge in the outlook period, thereby fostering price stability and anchoring inflation and exchange rate expectations,” said Dr Mangudya.

To ensure sustained exchange rate and inflation stability, the MPC resolved to maintain the tight monetary stance while ensuring adequate support to the productive sectors of the economy particularly agriculture, agro-processing and small and medium enterprises.

Article Source: The Chronicle