The Reserve Bank of Zimbabwe (RBZ) said it will release smaller gold coins as part of the measures to slow down inflation, reduce the demand for foreign currency on the local market, and for the majority of the local people to invest in gold coins.
In the Mid-Term Monetary Policy statement released yesterday, the RBZ Governor Dr.John Mangudya said the bank will be releasing the smaller gold coins in mid-November this year to allow more buyers for the gold coin.
“Following the successful launch of the gold coins on July 25 2022 and in response to public demand, the bank shall introduce and release into the market gold coins in smaller units of a tenth ounce, quarter ounce, and half ounce for sale with effect from mid-November 2022.
“ The recent stabilization measures have however resulted in the slowdown in monthly inflation, from 31,7% in June to 25,6% in July 2022. In addition, the shift towards a more liberalized exchange rate, through the introduction of the willing-buyer/willing-seller foreign exchange trading system in May 2022, has significantly reduced the parallel market exchange rate premium, from about 140% to the current 60% as at the end of July 2022”
“The Bank has maintained its tight monetary stance to control inflationary and exchange rate pressures emanating from global and domestic shocks,” he said.
Dr. Mangudya said the measures put in place to destabilize foreign currency exchange rate will lead to price stability in the near future.
“ The Bank strongly believes that the currently tight monetary policy stance complemented by the strong will by Government to put in place measures that deal with factors that destabilize the foreign exchange market will result in the exchange rate and price stability in the near and short-term.
“Thus, the decline in month-on-month inflation is expected to continue up to the end of this year and into 2023.
“ This is essential for value preservation of the local currency and ‘sine qua non ‘ to promote its use for transnational purposes,” he said.
Dr. Mangudya also revealed that most of the gold coins were being bought in local currency than in foreign currency.
“ As at 10 August 2022, 4 475 gold coins had been sold, realising $3,7 billion of which 90% was paid in local currency and the balance in foreign currency, and evenly distribute throughout the agents,” he said.
He also revealed that gold deliveries at Fidelity Printers and Refinery Company wholly owned by RBZ increased for the period 1 January to 30 June compared to the same period last year.
“Gold deliveries to Fidelity Gold Refinery (Private) Limited (FGR) for the period 1 January 2022 to 30 June 2022 were 15,972.52kgs, compared to 9,954.67kgs delivered during the same period in 2021.
“Total deliveries during the first half of 2022 were 60, 45% or 954,67kg more than what was achieved over the same period in 2021. At this rate, the bank’ projection of deliveries of 35 000 tonnes is within reach.
“To ensure that the set target is achieved, there is need to maintain the incentives and complement them with increased monitoring of gold producers to reduce leakages into the parallel market,” he said.