Zimbabwe gold-backed digital tokens mop out $14 billion

Gold-backed digital tokens which were introduced this week as one of the measures to shore up the local currency mopped out $14 billion with United States dollar purchases amounting to only US$810.

The International Monetary Fund cautioned Zimbabwe against the move suggesting that the country should simply liberalise the exchange rate.

The Reserve Bank of Zimbabwe yesterday said tokens taken up represented 139.57kg of gold. There were 135 bids 132 of them in Zimbabwe dollars.

A member of the Reserve Bank of Zimbabwe’s Monetary Policy Committee, Percy Gwanyanya, said the uptake of the tokens was very encouraging as the $14 billion was almost 10% of the country’s reserve money which he said was $150 billion.

Gwanyanya also said people should not take for granted the power of the government to sort out the economy. 

The government curbed the slide of the local currency last year when it introduced gold coins, Gwanyanya said. It is doing so again, he said.

Opposition leader and former FinanceMinister Tendai Biti, however, said this was not going to work.

“These guys are clueless. They do not know what they are doing. We are tired of adhocratic policies. They are doing what is called kick and hope,” he told NewsDay. “The only solution is to dollarise because their experiment has failed.”

Industry says dollarisation will cripple the economy.

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