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Gold Coin Sales Reach ZW$ 9 Billion

Mosi-Oa-Tunya Gold Coins

A total of 9516 gold coins valued at ZW$9 billion had been sold as at 23 September 2022, data from the Reserve of Bank of Zimbabwe show.

Of this total, 35 percent were sold to individuals while 65 percent were taken by corporates, including asset management and insurance entities.

The Mosi Oa Tunya gold coins were introduced in July this year to mop up excess local currency in circulation which was putting pressure on the exchange rate and subsequently driving inflation.

Since their introduction, gold coins have received tremendous uptake as holders of local currency rushed to dump their balances in return for a more reliable store of value, in the gold.

In its monetary policy committee meeting update, the Central Bank said it was satisfied by the confidence and uptake of gold coins as an alternative investment product to holding the US dollar.

It also expressed satisfaction with the positive impact of the recent policy measures, which have resulted in the significant fall of month-on-month inflation from 12.4% in August 2022 to 3.47% in September 2022.

“The decline in month-on-month inflation has in turn resulted in the decline in annual inflation to 280.4% in September 2022, down from 285.1% in August 2022. The Committee had projected annual inflation to start tapering in September 2022, having earlier reached its plateau in August 2022,” said RBZ.

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The Bank will continue to keep a hawk’s eye on money supply after  resolved to maintain the Bank policy rate and medium-term lending rate at current levels of 200 percent and 100 percent, respectively, which it further stated that , “until durable stability, measured by a sustained decline in month-on-month inflation to desired levels of less than 5%, is attained.”

It also undertook to further liberalize the foreign exchange market by increasing the maximum amount that entities can purchase from banks for bona fide foreign payments under the willing-buyer willing-seller system from the current level of US$20,000 to US$100,000 per week per entity.

“Going forward, the MPC expects that a combination of the current tight monetary policy, continued use of gold coins, foreign exchange auction system, insistence of value for money by Government in its procurement processes and practices, close monitoring of possible occurrence of wage-push inflation and effective monitoring and enforcement by the Financial Intelligence Unit will sustainably anchor exchange rate expectations, thus limiting the exchange rate pass-through to inflation,” said the Bank.

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