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Zimbabwe to introduce gold coins as local currency tumbles

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Gold cash are displayed on the Ginza Tanaka retailer in Tokyo September 18, 2008. REUTERS/Yuriko Nakao

HARARE, July 5 (Reuters) – Zimbabwe’s central financial institution mentioned it could begin promoting gold cash this month as a retailer of worth to tame runaway inflation, which has significantly weakened the native foreign money.

The central financial institution governor John Mangudya mentioned in an announcement on Monday that the cash can be out there on the market from July 25 in native foreign money, U.S. {dollars} and different foreign currency echange at a value based mostly on the prevailing worldwide value of gold and the price of manufacturing.

The “Mosi-oa-tunya” coin, named after Victoria falls, might be transformed into money and be traded regionally and internationally, the central financial institution mentioned.

The gold coin will include one troy ounce of gold and can be bought by Constancy Gold Refinery, Aurex and native banks, it added.

Gold cash are utilized by traders internationally to hedge in opposition to inflation and wars.

Final week, Zimbabwe greater than doubled its coverage charge to 200% from 80% and outlined plans to make the U.S. greenback authorized tender for the subsequent 5 years to spice up confidence. Learn full story

Hovering inflation within the southern African nation has been piling strain on a inhabitants already battling shortages and stirring recollections of financial chaos years in the past below veteran chief Robert Mugabe’s close to four-decade rule.

Annual inflation, which hit virtually 192% in June, solid a shadow over President Emmerson Mnangagwa’s bid to revitalise the economic system.

Zimbabwe deserted its inflation-ravaged greenback in 2009, opting as an alternative to make use of foreign currency echange, largely the U.S. greenback. The federal government reintroduced the native foreign money in 2019, but it surely has quickly misplaced worth once more.

(Reporting by Nyasha Chingono, Enhancing by Anait Miridzhanian and Louise Heavens)

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