Zimbabwe saw strong demand for its gold coins, which were issued to curb inflation. It provided a store of value for the country's declining currency, not to mention gave the public an alternative to the US dollar.
Bloomberg reported that the country's central bank sold 1,500 gold coins after the launch of the program last July 25. Now, it plans to make another 2,000 gold coins available to the public.
At the time of writing, the central bank is selling one troy ounce of 22-carat gold coins called "Mosi-Oa-Tunya", which means smoke that thunders, referring to the Victoria Falls. Each gold coin has a serial number and can be purchased with local currency, the US dollar and other foreign currencies. The price is set based on the international gold price and production costs. Each gold coin was worth $1,841 as of Monday.
The owners of gold coins can convert them into cash or exchange them if necessary. It could also be used for transactional purposes and as collateral for loans. The purpose of the gold coins is to reduce the demand for US dollars after the collapse of the Zimbabwean dollar. Rising inflation and currency devaluation have made life difficult for the people of Zimbabwe.
Data says annual inflation in the country amounted to almost 192% in June. In response to this crisis, Zimbabwe's central bank raised its key rate from 80% to 200%, a new record. The government also announced that in order to stabilize the country's exchange rate, it will accept the US dollar as legal tender within the next five years. This is the second time in over a decade that Zimbabwe has legalized the US dollar as legal tender.
