The Reserve Bank of Zimbabwe (RBZ) Gold rush has seen demand for the new Zimbabwean gold coins overwhelming to an extent of running out of the very coins that banks have been inundated by their corporate and individual customers seeking this newly introduced legal and sensible way of preserving value.
Reserve Bank of Zimbabwe Governor Dr John Panonetsa Mangudya introduced the coins a week ago to help cushion corporates and individuals from the negative impact of declining cash values and mop up large sums of Zimbabwe dollars sloshing around in some bank accounts of corporates and wealthy individuals.
Bankers Association of Zimbabwe president Mr Fanwell Mutogo said banks were now seeking to replenish their stocks of gold coins following a huge demand that saw them exhaust their initial allocations.
“The demand for the gold coins has been overwhelming both from individuals and corporates although the ratio is in favour of corporates. Most banks are now in the process of ordering more coins from the Reserve Bank of Zimbabwe to replenish their stocks,” he said.
Zimbabwean gold coins, each hold one troy ounce of gold, and are minted at the Fidelity Gold Refineries where they are being sold through normal banking channels and Reserve Bank agencies. The price is the price of a troy ounce of gold plus a 10 percent minting charge.
RBZ Monetary policy committee member, Mr Percy Gwanyanya, concurred with Mr Mutogo on the demand and noted that even those that were critical of the policy of selling bullion coins were anxious to be considered.
Gwanyana said the whole idea of the gold coins is to provide a viable alternative to the United States dollar as a store of value.
“That is necessary to deal with inflation and currency depreciation which were being driven by the high demand for the US dollar. The auction system has mainly been catering for the constituency that is in international trade,” said Mr Gwanyanya.
Gwanyana added there are some people or institutions with huge sums of local currency on hand and they need to be catered for by having access to facilities that enable them to store value and protect them against exchange rate changes.
This same process also returns those huge sums in unused local currency back to the Reserve Bank instead of having it in the hands of black market dealers where it would be used for manipulation.
Most Zimbabweans were breaking the law by going to the black market to buy US dollars to stash away in safes and trunks, but now they can legally buy the coins instead and their purchases take the local currency used to buy the coins out of circulation.