With inflation soaring in Zimbabwe and the country’s currency in free fall as people abandon it for the U.S. dollar, the government of President Emmerson Mnangagwa is fighting back by introducing Zimbabwe Gold Coin. But economists and ordinary Zimbabweans are skeptical. Read on to find out more about Zimbabwe Gold Coin.
Zimbabwe Gold Coin
The Central Bank of Zimbabwe launched Zimbabwe Gold Coin on 26 July 2022 with the hope that it will ease citizens’ demands for foreign currency. The Zimbabwe Gold Coin is called “Mosi-oa-Tunya,” which means “The Smoke Which Thunders,” and refers to Victoria Falls, on the border between Zimbabwe and Zambia.
The Bank said that the Zimbabwe coin will be tradable both in Zimbabwe and overseas and can be exchanged for cash. Launching this coin aims to reduce the quantity of Zimbabwe dollars in circulation to eventually restore that currency’s value and curb soaring inflation amid a slump in the country’s currency. The governor of the Central Bank of Zimbabwe, John Mangudya, also said that the coin could be used in shops if they have enough change.
Zimbabwe’s dollar slumped in value against major currencies this year, and the local currency was reintroduced a decade later. Still, it has rapidly lost value again, which brought about the launching of the Zimbabwe Gold Coin as a form of insurance against inflation and conflict and to stabilize the economy.
Understanding The Economy Of Zimbabwe
Economic crises are nothing new to people in the southern African nation, who have faced hyperinflation, food and fuel shortages, overwhelming unemployment, and other hardships for over two decades. It reminds the country of the economic chaos under the late Robert Mugabe, who ruled for almost four decades. Hyperinflation forced it to abandon the Zimbabwe dollar in 2009, and it decided to use foreign currencies, mainly the U.S. dollar. During the worst crisis, the government stopped publishing official inflation figures.
At the time, the one hundred billion Zimbabwe dollar banknote was seen as a symbol of the nation’s economic collapse. Mugabe’s government had to print a 100 trillion-dollar note, the largest in world history, before the country abandoned its currency in 2015 for the U.S. dollar. Mugabe was forced to resign in 2017, and the Zim dollar, as it is known, was reintroduced two years later. But as it again falls, Finance Minister Mthuli Ncube warned that businesses refusing to accept the currency from customers could lose their trading licenses.
Most of Zimbabwe’s inflationary pressures emanate from its currency troubles. But rising prices are also fueled by Russia’s invasion of Ukraine, which has sparked a global wave of inflation amid supply shortages of grains and fuel.
Before the COVID-19 pandemic, Zimbabwe’s economy was already in recession. Output fell because of economic instability and the removal of subsidies on maize meal, fuel, and electricity prices; suppressed foreign exchange earnings; and excessive money creation. The onset of the COVID-19 pandemic and continued drought led to the inflation soaring.
Foreign exchange reforms were instituted in June 2020, dampening inflation at an annual rate of 839% in July. Fiscal and current account deficits recovered after July but declined for the year. The exchange rate depreciated in February 2019 and stabilized to the U.S. dollar in December 2020. Poverty and unemployment increased to date.
Zimbabwe Gold Coin Price
The price of Zimbabwe Coin Price cost about $1,800 each per troy ounce late last week, and institutional investors may be the coins’ principal buyers. Local agencies commenced selling the gold coins on an agency basis at the initial price of 1,823.83 U.S. dollars per gold coin or 805,745.35 Zimbabwean dollars using the willing buyer willing seller selling rate as of Friday.
Where And How To Buy Zimbabwe Gold Coin
Let’s look at where and how one can buy Zimbabwe Gold Coin.
Any individual or company that wants to buy the Zimbabwe Gold Coin will buy it by checking any authorized openings such as banks, buy it from them and keep the coins at a bank or take them home. Still, foreigners can only buy the coins in foreign currency.
Economists and ordinary Zimbabweans are skeptical because the institutional investors might be the principal buyers of the Zimbabwe Gold Coin. Chitambara, a senior researcher at the Labor and Economic Development Research Institute of Zimbabwe, said that no ordinary person will be able to afford the Zimbabwe Gold Coin right now because Zimbabweans are living hand-to-mouth now,
Also, Zimbabwe’s central Bank would have to buy the gold from metal miners, such as informal artisanal miners could present challenges and result in increased smuggling.
Having discussed Zimbabwe Gold Coin, the Economy of Zimbabwe, Zimbabwe Gold Coin Price, and Where and How to Buy Zimbabwe Gold Coin, please let’s have your view and contribution to this guide.