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Gold Coin Alternative Store Value To USD Amid Rising Hedge Inflation

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Gold Coin Alternative Store Value To USD Amid Rising Hedge Inflation.

Reserve Bank of Zimbabwe (RBZ) Governor Dr John Panonetsa Mangudya allayed fears of inflation through yesterday’s launch of the first batch of gold coins. This after Zimbabwe has lately been battling high inflation and the introduction of gold coins is expected to provide an alternative to store value besides the most sought-after United States dollar amid rising inflation, which has driven demand for the greenback to hedge inflation.

Yearly inflation surged to 191, 6 percent in June this year from 131, 7 percent a month earlier, which has largely been the result of local currency depreciation and also partly the negative impact of the war in Ukraine.

The Mosi-oa-Tunya, in terms of liquidity and tradability, the coin will have liquid asset status, that is, it will be capable of being easily converted to cash, and will be tradable locally and internationally.

The gold coin which was unveiled by the Reserve Bank of Zimbabwe Governor Dr John Mangudya during a Press conference in Harare yesterday can also be used as collateral.

The apex bank boss said at the discretion of the holder of the gold coin, the bank or its agents will buy back the gold coins after “a vesting period of 180 days in line with the need to promote a savings culture in the country.”

Some Economic commentators have said that price stability is an added advantage of buying gold coins for investment and when compared to other investment options in the market, the price of gold never falls by a significant margin and is rather always stable even during a global financial crisis.

Everywhere in the world, people look at gold as an alternative to currency, particularly where the local money is prone to losing value.

Gold is a real physical asset that maintains its value in the market, which, in turn, proves that buying gold coins is a good investment option.

Dr. Mangudya said,
” The banks shall proceed to disburse those gold coins to their branches. Sometimes you could go to your bank and find that the branch does not have the coins, this is because there is a certain distribution channel that each bank or agent would use.”

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