The Reserve Bank of Zimbabwe (RBZ) will release 4 500 small gold coins on Tuesday, as the Government enhances measures to stabilise the local currency and curb inflation.
The smallest coin will be one-tenth of an ounce and will be sold in both local currency and United States dollars at a price based on the prevailing international price of gold, plus 5 percent to cover the cost of production and distribution.
In July this year, the central bank introduced one-ounce gold coins.
Over 11 000 coins worth $11,4 billion have been sold to date, with corporates accounting for the biggest share.
RBZ governor, Dr John Mangudya, yesterday told The Sunday Mail that the introduction of the first gold coins significantly contributed to taming inflation, prompting the authorities to introduce small denominations that will further stabilise the economy.
“We shall be releasing an initial quantity of 4 500 gold coins of lower denomination from November 15, 2022 in line with our previous advice to the market,” Dr Mangudya said.
“The RBZ will be introducing one-tenth of an ounce, one-quarter and half of an ounce onto the market. So far, 11 475 gold coins have been sold for $11,4 billion,” he said.
The Mosi-oa Tunya gold coins, Dr Mangudya added, have been successful in mopping up excess liquidity in the economy.
“We will fulfil what we said earlier about the gold coins of smaller denominations to ensure that everyone has a chance to invest and store value in the gold coins.
“The response to gold coins has been positive, so, by introducing smaller denominations, demand is likely to increase and this will assist in mopping up liquidity from the market and enhance value of the local currency.”
The country’s month-on-month inflation fell for the fourth consecutive month in October.
Monetary authorities expect it to further decline to 3 percent by year-end, while the annual rate is anticipated to drop below 100 percent on the back of monetary and fiscal interventions Government is implementing.
Economist, Mr Eddie Cross, said the injection of more gold coins will have a positive impact on the economy.
“So far, the response to gold coins has been positive. I have always been of the view that more gold coins were needed to make a significant impact on the economy. So, by introducing small denominations, the positive impact that the coins have had on the economy will surely be enhanced,” he said.
Another economist, Mr Prosper Chitambara, said the RBZ’s latest move dovetails with President Mnangagwa’s mantra of leaving no one and no place behind.
“They (gold coins) have been effective in terms of contributing to stability through mopping up of excess liquidity in the economy as well as providing an alternative investment asset. The subscription has been positive, especially by corporates,” he said.
“We are already seeing stability in terms of inflation numbers. Obviously, it is part of cocktail reforms which Government has been implementing.
“So, I think the response to smaller denominations of gold coins will be positive to small investors and for ordinary citizens to also be able to invest.”