ZW$20 billion worth of gold coins sold to date

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By Alois Vinga

GOLD coins worth ZW$20 billion have been sold to date with the bulk being snapped up by corporates contributing towards mopping up of excess liquidity, the Reserve Bank of Zimbabwe (RBZ) latest Monetary Policy Statement (MPS) has revealed.

The gold coins were introduced as both an alternative retail investment product for value preservation in the dual currency system and a liquidity mopping instrument over and above the foreign exchange auction system.

Presenting the first MPS for 2023, RBZ governor John Mangudya said the quantum of gold coins sold to date has increased.

“The gold coins have been well received with 25 188 coins valued at ZW$20 billion having been sold as at 13 January 2023. The bulk of gold coins, 84% were bought by corporates while purchases by individuals accounted for 16%.

“The gold coins have a vesting period of 180 days after which the Bank can buy them back from the investors,” he said.

He said the use of gold coins as an open market instrument for managing liquidity will continue as part of the bank’s sterilisation interventions to achieve a stable exchange rate and maintained that the bank has no plans to withdraw the gold coins in the short and medium term.

Withdrawal of the instrument will only be considered when stability starts to create a high appetite for business and consumers to hold domestic currency denominated assets.

As such, the issuance of both higher and smaller denominations of gold coins will continue as an open-market operation (OMO) instrument and investment instrument for value preservation.

“The maximum amount of foreign currency cash and gold coins that may be taken out of Zimbabwe on person or in the baggage of a person who is leaving Zimbabwe has been reviewed from US$5,000 or its equivalent in any other currency or combination of currencies, to US$10,000 or its equivalent in any other currency or combination of currencies,” said Mangudya.

To cater for those with lower savings, the Bank introduced smaller denominations in November 2022. As at 13 January 2023, the smaller denominations accounted for 38% of all sales.