Zimbabwe says it will introduce gold coins later this month as it tries to contain rising inflation amid a fall in its currency. The country’s central bank also outlined plans to make the US dollar legal tender for the next five years.
The central bank’s key interest rate more than doubled this month to 200% after the annual rate of inflation rose above 190%. The Zimbabwean dollar has fallen in value against major currencies this year.
Reserve Bank of Zimbabwe Governor John P Mangudya said in a statement that the gold coins, which will contain one troy ounce of 22-carat gold, will be available from July 25.
“The gold coins will be available for sale to the public in both local currency and US dollars and other foreign currencies at a price based on the prevailing international price of gold and the cost of production,” Mr Mangudya added.
The statement also said each coin will be identified with a serial number and can be easily converted to cash, locally and internationally.
It will be called the “Mosi-oa-Tunya Gold Coin”, which means “The Smoke Which Thunders,” a reference to Victoria Falls which is located on the border between Zimbabwe and Zambia.
The announcement is part of the Zimbabwe government’s measures to tackle the country’s currency crisis.
Last month, the annual rate of inflation hit 191.6%, while the Zimbabwean dollar has lost more than two-thirds of its value against the US dollar since the start of 2022.
Rising inflation has put pressure on President Emmerson Mnangagwa in a country that still remembers the economic chaos under Robert Mugabe’s nearly four decades of rule.
Hyperinflation forced the country to abandon the Zimbabwean dollar in 2009, and instead opted to use foreign currencies, primarily the US dollar.
During the worst of the crisis, the government stopped publishing official inflation figures, but an estimated 89.7 sextillion per cent year-on-year in mid-November 2008.
At the time, the one-hundred billion Zimbabwean dollar note was seen as a symbol of the country’s economic collapse. The local currency was reintroduced a decade later but has rapidly lost value again.