London Daily

Focus on the big picture.
Saturday, May 31, 2025

Zimbabwe launches gold coins as legal tender to tackle hyperinflation

Zimbabwe launches gold coins as legal tender to tackle hyperinflation

According to the International Monetary Fund, inflation in Zimbabwe reached 837% (year on year) in July 2020 and, although tighter fiscal policy helped reduce it to 60.7% by the end of last year, it remains in the high double-digits.

Zimbabwe has launched new gold coins to be sold to the public in a bid to tackle chronic hyperinflation.

The gold coins - called Mosi-oa-Tunya - will have "liquid asset status", meaning they can be converted to cash, traded locally and internationally, and used for transactions, the Reserve Bank of Zimbabwe said.

People can only trade the coins for cash after holding them for at least 180 days.

Zimbabwean economist Prosper Chitambara said: "The government is trying to moderate the very high demand for the US dollar because this high demand is not being matched by supply."

According to the International Monetary Fund, inflation in Zimbabwe reached 837% (year on year) in July 2020 and, although tighter fiscal policy helped reduce it to 60.7% by the end of last year, it remains in the high double-digits.

This wipes away the value of people's savings - many people saw their savings wiped out by the 5 billion per cent inflation seen in 2008, according to the IMF.

This insecurity affects trust in the local currency, the Zimbabwe dollar - many retailers don't accept it and many Zimbabweans prefer to use US dollars for savings or daily transactions.

'Chronic hyperinflation'


Mr Chitambara said: "For Zimbabwe we are in chronic hyperinflation so the expectation is that there will be a huge uptake of these gold coins."

The coins, which have a purity of 22 carats, will be priced based on the international market rate for an ounce of gold, plus 5% to cover production and distribution.

But that price could put them out of reach for many people in a country so poor that a third of the population is at risk of food insecurity.

At the time of the launch on Monday, the cost of a Mosi-oa-Tunya coin was US$1,824 (£1,514).

"For the common man, there is not really much to benefit directly from this, especially if you don't have any excess cash," said Mr Chitambara.

"Many people have no money for bread, let alone for savings.

"The expectation is that indirectly it will benefit the ordinary person through moderating the prices."

Concerns over increased smuggling


Concerns have also been raised that the new coins could result in increased gold smuggling.

Zimbabwe has big gold deposits and exporting the metal provides one of its main foreign currency earners.

But smuggling is widespread as, while all gold mined in the country is legally required to be sold to the central bank, many producers prefer to move it overseas to get payment in US dollars.

Securities firm Morgan & Co said in a market intelligence report: "Gold deliveries in Zimbabwe have significantly recovered because of the appetising US dollar payments offered to artisanal miners.

"However, should there be a disparity between the amount of US dollars used to purchase the gold from miners and the US dollars used to pay for the coins, this could squeeze the central bank and its intermediaries' foreign currency reserves.

"If this ripples to artisanal gold miners, this could result in low deliveries to Fidelity Printers and increase gold smuggling activities."

Fidelity Printers, a subsidiary of the central bank, is the country's only authorised gold buyer.

Newsletter

Related Articles

0:00
0:00
Close
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
Italy Faces Population Decline Amid Youth Emigration
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Trump Accuses China of Violating Trade Agreement
Gerry Adams Wins Libel Case Against BBC
Russia Accuses Serbia of Supplying Arms to Ukraine
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
Chinese Woman Dies After Being Forced to Visit Bank Despite Critical Illness
President Trump Grants Full Pardons to Reality TV Stars Todd and Julie Chrisley
Texas Enacts App Store Accountability Act Mandating Age Verification
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Vatican Calls for Sustainable Tourism in 2025 Message
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Trump Threatens 25% Tariff on iPhones Amid Dispute with Apple CEO
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
Liverpool Car Ramming Incident Leaves Multiple Injured
Australia Faces Immigration Debate Following Labor Party Victory
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
Macron Dismisses Viral Video of Wife's Gesture as Playful Banter
Cleveland Clinic Study Questions Effectiveness of Recent Flu Vaccine
Netanyahu Accuses Starmer of Siding with Hamas
Junior Doctors Threaten Strike Over 4% Pay Offer
Labour MPs Urge Chancellor to Tax Wealthy Over Cutting Welfare
Publication of UK Child Poverty Strategy Delayed Until Autumn
France Detains UK Fishing Vessel Amid Post-Brexit Tensions
Calls Grow to Resume Syrian Asylum Claims in UK
Nigel Farage Pledges to Reinstate Winter Fuel Payments
Boris and Carrie Johnson Welcome Daughter Poppy
×