Last updated on July 31st, 2022 at 07:33 am
Zimbabwe will begin to sell gold coins later this month to tame inflation, the country’s central bank announced this week. The inflation in Zimbabwe continues to send costs soaring for everything from fuel to groceries.
The country in southern Africa will begin issuing gold coins to its citizens as the local currency dramatically loses value. According to a statement by the central bank governor John Mangudya, the gold coins will be introduced as a “store of value,” which means Zimbabweans can exchange the coins in the future without worrying about the coins deteriorating in value.
How will the coin be sold?
According to central bank governor John Mangudya, the coins will be sold based on the international price of gold and the cost of production. Zimbabweans can purchase the coins by using Zimbabwean dollars, US Dollars, and other currencies from July 25. The Zimbabwean dollar is the official currency in the country.
The gold coins will be called “Mosi-oa-tunya,” which means “The Smoke Which Thunders”.
Inflation in Zimbabwe
Zimbabwe, a country of fewer than 15 million people, is struggling to tame inflation. The Zimbabwean dollar has rapidly been declining in value. The currency has been devalued by over 40 per cent since the beginning of the year.
The annual inflation in Zimbabwe rose to 191.6 per cent in June because prices of cooking oil, fuel and bread increased rapidly as a result of Russia’s invasion of Ukraine.
Recently, Zimbabwe’s central bank announced to hike the interest rate to 190 per cent to control the soaring inflation. The plan to hike the interest rates was among the measures to curb inflation.
This is not the first time the country has struggled with hyperinflation. In 2008, Zimbabwe’s inflation rate shot up to 89.7 sextillions per cent. The government then ditched the local currency and adopted the US dollar as legal tender.