RBZ says gold coins to be held for at least 180 days

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By Xinhua

Individuals and institutional buyers of Reserve Bank of Zimbabwe (RBZ’s) gold coins will be required to hold them for at least 180 days before selling while exporters earning less than a million U.S. dollars will be allowed to use the surrender portion of their receipts to purchase the coins in foreign currency.

Earlier this month, Zimbabwe’s central bank said it would start selling gold coins from July 25th as a store of value to tame runaway inflation, which has considerably weakened the local currency.

The central bank wants the gold coins to serve chiefly as an alternative to hoarding U.S. dollars and hopes coins’ use will reduce demand for U.S. currency.

On redemption, both residents and non-residents will have the option to be paid in U.S. or Zimbabwe dollars.

However, in an effort to make the gold coins serve their true purpose as an alternative investment, they cannot be sold within 180 days of procurement.

“At the discretion of the holder of the gold coin, the bank or its agents will buy back the Mosi-oa-Tunya gold coins after a vesting period of 180 days in line with the need to promote a savings culture in the country,” said the RBZ.

The “Mosi-oa-tunya” coin, named after Victoria falls, can be converted into cash and be traded locally and internationally.

Central bank governor John Mangudya said that the coins will be available in local currency, U.S. dollars and other foreign currencies at a price based on the prevailing international price of gold and the cost of production.

The London Bullion Market Association price, a renowned global market for gold, will be the benchmark on which the 5 percent margin cost cover will be added.

The “Mosi-oa-tunya” coin, named after Victoria falls, can be converted into cash and be traded locally and internationally, the central bank said.