Zimbabwe gold coins mop out $3.7 billion in two weeks

The Reserve Bank of Zimbabwe says it had sold 4 475 gold coins by 10 August realising $3.7 billion, 90% of which was paid in local currency.

It is now planning to introduce smaller coins by November to cater for small players.

The central bank said yesterday the high demand for the gold coins will assist in mopping up liquidity from the market and thus strengthen the demand and enhance the value of the local currency.

The gold coins were introduced on 25 July as a store of value and to mop out excess liquidity in the market.

The coin kicked off at US$1 823.80 which was $805 745.35 and was pegged at US$1 886.54 or $948 989.74 today.

The central bank said it will introduce a small coin containing just over 3.11g of gold. It will cost US$188.48 but the actual price will be determined by the world price of gold at the time.

Currently one has to hold the gold coin for six months (180 days) before selling it.

The mopping out of excess liquidity has seen the local currency firming from $950 on the swipe or zipit rate to $800.

The mobile money rate is $750 and the cash rate $700.

The Zimbabwe dollar trades at $458.3653 at the auction rate, $481.8543 at the interbank rate and $496.9222 at the gold coin rate.

It is not yet clear how the gold coin will impact on inflation but the central bank’s monetary policy committee said annual inflation would continue to rise until September but month-on-mo nth inflation will be declining.

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