Is this African country planning to replace its "valueless" local currency with gold coins?

Zimbabwe's gold coins will help store value amid currency devaluation
  • Zimbabwe's gold coins are expected to help store value amid currency devaluation.
  • The gold coins will become available to the public starting from July 25, 2022.
  • The Reserve Bank of Zimbabwe said the gold coins possess both liquidity and tradability features.

Zimbabwe has long been struggling with hyperinflation and a faltering local currency which have necessitated the introduction of different solutions aimed at controlling the situation. Among these measures was the dollarisation of the economy between 2009 and 2019. But even this did very little to solve the problem. And now, the country's central bank is proposing yet another possible solution—gold coins.

In a statement released Monday and signed by Governor John Mangudya of the Reserve Bank of Zimbabwe, Zimbabweans were informed that the gold coins are intended to serve as a store of value.

The decision to introduce the coins was reached during the apex bank's recently held Monetary Policy Committee meeting on June 24, 2022.

Business Insider Africa understands that the gold coins will become available for sale/purchase starting July 25, 2022. It could be bought with the Zimbabwean local currency, dollars and other foreign currencies. Meanwhile, the price would be based on prevailing international gold price.

"The gold coins will be available for sale to the public from 25 July 2022 in both local currency (ZW$) and United States Dollars (US$) (and other foreign currencies) at a price based on the prevailing international price of gold and the cost of production. The coins will be sold through the Bank and its subsidiaries, Fidelity Gold Refinery (Private) Limitedn and Aurex (Private) Limited, local banks and selected international banking partners," said a part of the statement.

Do note that one of the key features of the 22 carats gold coins is that they will be liquid and tradable. In other words, they could be easily converted to cash, traded locally and internationally and used for other transactions.

The coins can also be used as security for loans and other credit facilities. In the same vein, institutional investors can use it "to meet regulatory requirements for prescribed asset investments."

In the meantime, the development has elicited reactions from many Zimbabweans, some of whom have expressed scepticism as to whether the measure could actually work. Zimbabwean Freelance Journalist, Sharon Mazingaizo, wrote on Twitter that many people may not even be able to afford the coins.


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