RBZ says gold coin buyers will need to prove source of funds

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By Xinhua

THE central bank recently announced the introduction of the gold coins as a store of value amid soaring inflation and depreciation of the local Zimbabwean dollar against major currencies.

The bank on Monday issued guidelines for the purchase of the Mosi-oa-Tunya gold coins, which will be released on July 25, saying that the agents will include authorized dealers (banks) its subsidiaries and foreign banks to sell the coins.

Mosi-oa-Tunya is the local name of the Victoria Falls, which is located on the border of Zimbabwe and Zambia to the north.

“All sales of the gold coins by the agents will be subject to Know Your Customer principles in line with international best practice, which include declaration of the source of funds,” a statement from the bank said.

The bank said once payment had been received by the agent through normal banking channels, a buyer was allowed to take physical possession and ownership of the coin or opt to keep it through a registered bank (custodial services) on terms and conditions of the service provider.

To promote a culture of saving, the coins can only be resold after 180 days, and all buybacks will be done on provision of the original bearer certificate for the specific coin, the bank said.

On selling, customers may decide whether they want to be paid in local or foreign currency.

Among the features of the 22-carat coin is a serial number.

Residents and non-residents will be allowed to export the coins supported by the bearer certificate of each coin, the bank added.

“Agents shall sell the Mosi-oa-Tunya gold coins in both local currency and United States dollars and other tradable/denominated foreign currencies at the willing-buyer willing-seller exchange rate,” it said.

“Denominated currencies for the purpose of buying gold coins will include the British Pound, the Euro, Australian Dollar, Botswana Pula and Rand,” said the bank.

“Upon receipt of the purchase price from the gold coin buyers, the agent shall transfer to the Reserve Bank within 24 hours, the amounts received from purchasers in the currencies of purchase,” the bank said.

The gold coin will be sold at the prevailing international price of gold plus 5 percent to cover the cost of production and distribution of the coin on a payment versus delivery basis.

“The Bank shall publish the Mosi-oa-Tunya gold coin price by 8 a.m. daily, which shall be based on the previous day’s London Bullion Market Association (LBMA) PM Fix plus the cost of producing the coin,” the central bank said.

Domestic buyers including individuals may buy in local currency or foreign currency.

Domestic corporates including institutional investors will be allowed to buy the gold coins in local currency or foreign currency, subject to quantity restrictions where it is deemed necessary.

“Exporting entities shall buy Mosi-oa-Tunya gold coins in foreign currency, from their retained export portions,” the central bank said.

“Notwithstanding this requirement, exporters whose annual export receipts in 2021 were less than 1 million U.S. dollars, shall require a specific Exchange Control approval to be permitted to utilize a portion of their surrender portion that is payable in local currency, to purchase the gold coins,” the central bank said.

Local banking institutions shall not be allowed to buy the coins for their own portfolios up until such a time as the Reserve Bank may grant the permission.

“Thus for the time being, banks can only receive the coins from the Reserve Bank for onward selling to their customers on behalf of the Reserve Bank; and non-resident (international) buyers shall only buy the Mosi-oa-Tunya gold coins in denominated foreign currencies,” the bank said.