Let’s embrace Mosi-Oa-Tunya, our wealth, our national pride

INFLATION has been rising in the country in recent months chiefly because of the weakening local currency and the impact of the ongoing conflict between Russia and Ukraine.

Given that the two Eastern Europe nations are among the globe’s biggest food producers with Russia a formidable oil producer, their conflict has destabilised the food and oil value chains worldwide.

As a result, there has been general price growth all over the world since February.

On January 31, the local currency was 115 to the US$ at the Reserve Bank of Zimbabwe (RBZ) auction, up from 108 on January 3.

On Tuesday this week, it was 403 to the greenback at the auction and 413 at the interbank market.

It is clear that, indeed, the local unit has lost considerable ground over the past seven months.

This has contributed to the increase in inflation. In January it was at 61 percent.

In June, it rose to 192 percent.

To stabilise the dollar and rein in inflation, the Government has instituted a number of measures including increasing lending rates to 200 percent to discourage speculative borrowing and increasing capital gains tax on shares traded on the Zimbabwe Stock Exchange.

In addition, the Government prolonged the period within which a person or entity can sell shares after buying them.

Yet another intervention to further stabilise the national currency as well as contain inflation will take effect on Monday.

From that day, people with the means will be free to buy gold coins from authorised dealers.

The RBZ came up with the idea having noted that high demand for the US$ was contributing to the decline in value of the local unit.

Now, instead of those people who, all along, had been rushing to buy up the US$ to store value, they are expected to, instead, rush to buy the Mosi-Oa-Tunya gold coins to achieve the same.

According to the RBZ, the coins will have liquid asset status, prescribed asset status, will be tradable, will be usable as collateral and can be bought-back at the instance of the holder.

The gold coins will be available for sale to the public in local currency, United States dollars and other foreign currencies at a price based on the prevailing international price of gold plus five percent to cover the cost of production and distribution of the coin on a payment versus delivery basis.

Once payment has been received by the selling agent, the central bank has said, the buyer shall take physical possession of the gold coin or opt to keep it through bankers of own choice.

At the discretion of the holder of the gold coin, the central bank or its agents will buy back the gold coins after a vesting period of 180 days in line with the need to promote a savings culture in the country.

We are deeply excited about the introduction of the coins.

We feel that apart from storing value, providing a hedge against inflation and assisting in stabilising the national currency, the coins will be a source of pride to those holding them.

And the name, Mosi-Oa-Tunya, defines what Zimbabwe is, its aspirations, its pride and its place in the world.

We encourage our people to embrace the coins so that the national currency does not continue weakening and for inflation to decline.

We hope that, taken together with other interventions, the gold coins will be helpful, and do so very soon.

Therefore, as soon as business opens for the week on Monday, our people must line up at RBZ and its agents to buy up the Mosi-Oa-Tunya.

Article Source: The Chronicle