Calls for RBZ to reduce gold coin mass
The Reserve Bank of Zimbabwe (RBZ) has been advised to consider reducing the mass of gold coins in order to cover some sections of the country’s population which might not be able to raise money to buy an ounce of gold.
Rudairo Mapuranga
RBZ recently announced the introduction of the gold coins as a store of value amid soaring inflation and depreciation of the local Zimbabwean dollar against major currencies. Local agents commenced selling the gold coins on an agent basis at the initial price of 1,823.80 per gold coin (an ounce) or in ZWL$805,745.35 using the willing-buyer-willing-seller rate selling rate as of 22 July 2022.
Speaking to Mining Zimbabwe former Zimbabwe Miners Federation (ZMF) Vice President who is also the current Chief Executive Officer of the Cotton Council of Zimbabwe (CCZ) Engineer Chris Murove said there should be lower value coins of half or quarter an ounce to enable many people to hedge against inflation which has hit the country and the world at large.
“In due course, there should be added lower value coins like ¼ and ½ ounces to ensure that the gold coins are affordable to a wider section of the Zimbabwean populace,” Engineer Chris Murove said.
Mineral Economist Lyman Mlambo said the corporate community and government should address the issue of affordability to ensure that Zimbabweans are earning enough money to be able to afford to preserve the value of what they are earning.
“This is really an issue of affordability, which needs to be addressed by increasing the disposable incomes of Zimbabwean citizens. Before people can store value (money) in gold coins as an asset they must have the value in the first place. This is no different from other assets. Better economic policies that result in more disposable income for workers and small-medium business enterprises should be implemented. How the macroeconomic environment could be improved is a wider discussion than the affordability of just gold coins,” Mlambo said.
Internationally, gold coins are used in countries such as China, South Africa and Australia to hedge against inflation and as an investment opportunity, although they are not as widely used as currency as envisaged by Zimbabwe’s central bank.