Inflation: Zimbabwe looks to gold
As inflation spirals out of control and the local currency continues to plummet, Zimbabwe is preparing to launch gold coins that will encourage investors to keep money inside the country.
What’s their current situation?
The decision was made after the inflation rate for June increased to 191.6% from 132.5% in May. John Mangudya, the head of Zimbabwe’s Central Bank, stated in a statement on Monday that the new gold coins will be minted by Fidelity Gold Refineries (Private) Limited – the country’s sole gold refining and buying entity – and would be sold through standard banking establishments.
Zimbabwe is experiencing a severe economic crisis marked by high inflation, a fast declining local currency, widespread unemployment, and a shrinking manufacturing sector. In addition to the new gold coins, the central bank will increase the interest rate from 50% to 100% per annum and also increase the lending rate from 80% to 200% per annum.
When will the coins be introduced?
While the potential introduction of the gold coins appears to be gaining support from investment analysts, the Central Bank has not disclosed a date for when the coins will become available. Isaac Muzambi, spokesman for the central bank, did not respond to inquiries regarding the anticipated launch date for the gold coins.