By Alois Vinga
RESERVE Bank of Zimbabwe (RBZ) says to date, ZW$14 billion worth of gold coins have been sold, with corporates consuming a large proportion of the instrument which has gone a long way to mop up excess money in the economy.
The central bank also called for the shift from Zim$ based inflation calculations, saying the method is ignoring the dual income nature of the economy, which is now in both Zim$ and US$ from corporate level down to a majority of individuals.
The gold coins were introduced as a cocktail of measures aimed at bringing stability of the local currency by creating an opportunity for the mop up of excess liquidity in the economy.
Speaking to delegates at the Confederation of Zimbabwe Retailers (CZR) organized post 2023 National Budget Breakfast meeting, RBZ deputy governor, Innocent Matshe revealed that gold coins’ sales continue to surge.
“As at November 22 this year, a total 14 000 gold coins were sold, with 90% being taken by corporates and only 10% being consumed by individuals. The total amount derived from these sales was ZW$13,6 billion since their introduction in July this year.
“The bank continues to offer smaller denominations for ordinary members of the public to access,” he said.
The idle local currency was identified by authorities as chief among the causes behind the local currency volatility as it was used to chase after the scarce foreign currency in the market, thereby prompting exchange rate hikes.
Matshe also called for the urgent reconsideration of departing from the Zim$ as a primary focus for basing inflation on, saying there is need to factor in the broader number of currencies in circulation.
“There is a need to sit down and come up with a realistic inflation measurement method. Currently, we have bank deposits which are 60% in foreign currency and just 40% in Zim$. Some workers are even generating income in both US$ and Zim$ but when measuring inflation there is a tendency of zeroing in on the local currency.
“I therefore suggest that all stakeholders need to come together and agree on something meaningful,” he said.
He added that the RBZ is still exploring ways to come up with a sustainable framework for the adoption of a crypto currency.