Staff Reporter
Citizens and the industry have hailed Government for introducing gold coins on the local market trade, a measure that has since proven to be a masterstroke in curbing inflation.
A survey by this publication has since revealed that industrialists and small to medium scale businesses have welcomed the strategy which has proven to be effective in easing demand for the greenback.
A business consultant who also works with the Confederation of Zimbabwe Industries (CZI) said industrialists had embraced the idea of buying gold coins as it enabled them to maintain the value of their liquid assets against the background of increasing inflation. The gold coins, which the Reserve Bank of Zimbabwe (RBZ) introduced last month, have significantly lessened the pressure on United States Dollar thereby stabilising the parallel market rate.
Some manufacturers and traders were pegging their prices against the black market which saw most basic consumer goods getting out of the reach of many. The consultant said most big companies had shifted from pursuing the USD to the gold coins since it was not subject to speculation.
“Naturally, as CZI we are on board with the gold coins. Gold price is regulated internationally which means it is immune to local speculation. As you know, the Reserve Bank would at times struggle to supply our demand for the USD so the introduction of the coins has allowed us as industry to seek for USD for our operations while we purchase gold coins to store the value of our cash reserves. Other countries like China have also started to store value using gold and moving away from the traditional USD,” he said.
Each coin is made up of 22 carat of gold and is pegged at US$1823.83. The coins can also be purchased using the local currency at the prevailing interbank rate on the day of the transaction.
Last week the RBZ also announced that it would be unveiling a smaller sized gold coin in November. This coin will be approximately one tenth of the already-circulating coins. The coins would be trading at approximately US$182.38 each. These coins are expected to further ease the pressure on USD demand. The smaller coin would also enable more people to participate in the use of gold coins to store the value of their local currency funds.
Other measures also implemented by Government to retain value on Zimbabwe dollar include restricting the flow of the local currency on the market. This has thus created higher demand for local currency.
Another source at the Zimbabwe Republic Police (ZRP) said they encouraged individuals and companies to buy gold coins as they were also a means of reducing risks of money heists which have been on the rise in the country. The source said gold coins were more secure and easier to track since they could only be redeemed at officially designated outlets.
