Harare, Zimbabwe – With the Gold Up price overall, the Reserve Bank of Zimbabwe in April put the gold coins that she stopped doing a year earlier on the market.
But interested investors had to act quickly.
In mid-June, the sale of coins of its accumulated actions was suddenly concluded and another chapter of Chaos de la Mint which characterized the country’s economy for decades was in books. This time, at least, economists say that experience had little effect.
Short -term sale is only the last example of a long line of incoherent policies, explains Ithiel Maveere, professor in the Department of Economy and Development at the University of Zimbabwe. Storage of value in a gold coin is not a viable option for the majority of the population, he adds.
“Ideally, what they should have done is to offer low -value parts, with denominations as low as equivalent to US $ 20 for the majority of the population,” explains Maveere.
However, the governor of the Reserve Bank of Zimbabwe, John Mushayavanhu, said in a written response to Global Press Journal that gold coins were effective as an alternative investment instrument and that there was a huge request from companies and individuals. According to RBZ data, companies bought around 79% of gold and individuals bought around 21%.
About $ 12 million sold
The lowest denomination of the parts represents a tenth of an ounce of gold, equivalent to 9,299.13 in Zimbabwe, or in zig, the national currency, or around US $ 347. The highest name of the parts represents an ounce of gold, equivalent to the Zig 92 991.34 or approximately $ 3,470.
In total, the central bank sold gold coins worth 343 million Zig Millions, or about $ 12.8 million, according to Mushayavanhu, which said that the recent sale occurred after the bank noted increased demand following the increase in international gold prices.
“In this context, the reserve bank has reissued an accumulated plot of gold coins from a combination of gold coins that had been bought at the market through buyouts and parts of parts which were still held at the Reserve Bank from the previously struck stock,” wrote the governor.
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A press release from the bank in mid-June announcing the sale of the sale indicated that it had been intended to erase the stock of gold coins that it had and to those which had been collected by their holders.
Mushayavanhu said that the bank ceased to kick gold in April 2024 to prioritize its gold reserve which, as well as the reserves of foreign currency, maintains the Golden Mint of Zimbabwe.
He said that foreign reserves increased from $ 270 million in April 2024 to US $ 731 million at the end of June.
The central bank presented for the first time the Mosi -Oa -Tunya Gold parts – which share an native name for Victoria Falls – in 2022 at a time when the country knew the instability of the currency with high inflation and a continuous devaluation of what was then the national currency, the zimbabwe dollar.
The parts aimed to reduce dependence on the US dollar and to stabilize the economy. The parts helped clean the excess species in local currency that circulated on the market. Coupled with other monetary measures in 2022, the monthly inflation rate increased from around 31% in June to around 12% in August of the same year.
However, the Zimbabwe dollar exchange rate has decreased considerably against the US dollar and the government replaced it with the new Zimbabwe gold currency in April 2024. Since its introduction, the value of the currency has been reduced by half.
A “drop in the ocean”
Lyle Begbie, an economist of Oxford Economics Africa, believes that the sale of gold coins when they were introduced in 2022 was more a revenue generation system, as happened at a time when inflation was very high.
He says it is logical that the recent sale of gold coins has been influenced by the increase in gold prices on the world market. But he adds that the value of gold coins was too little to have an impact on the economy. Begbie says that the $ 12.8 million in American coins that the Central Bank said sold are less than 1% of the gross domestic product in Zimbabwe – that the World Bank estimates that US 44 billion dollars – a “ocean drop” with regard to the macroeconomic image of the country.
Prosper Chitambara, an economist based in Harare, agrees that the impact of recent sales has been minimal. He says that gold coins have no significant impact on the stability of currencies in an economy like that of Zimbabwe, which is very informal and also highly dollarized – which means that it strongly depends on the US dollar as a currency.
“Most economic agents in our economy prefer to compromise using their US dollars because it is a highly negotiable and very liquid active.
Samuel Wadzai, Executive Director of Vendors Initiative For Social and Economic Transformation, an organization of Harare which defends the informal business sector, says that there have been a few cases where the members tried to use gold coins for daily transactions, but that was not widespread.
“Most traders always prefer species due to the challenges of acceptance and limited understanding of gold coins in daily trade,” he said.
Isheanesu Kwenda, 31, a street harare seller holding a sociology diploma, said that the recent sale of gold coins offered him no advantage. Like many Zimbabweans, he heard of gold coins, but has never seen or chose to buy them. The seller is part of the informal economy of Zimbabwe, which supports more than 80% of the Zimbabwe population and contributes almost 72% to the country’s GDP.
“Street Economics informs that you should not try to get something that you are not sure or that you do not understand.
Last year, Kwenda lost more than half of his earnings after the introduction of Zimbabwe gold. After being paid the equivalent of US $ 1,000 in Zimbabwe dollars, he managed to recover US $ 360 and lost the rest in exchange rate losses.
For Kwenda, the restoration of confidence is simple: the government must stick to a plan, without making sudden half-plays.