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Nqobile Bhebhe, Senior Business Reporter

RESERVE Bank of Zimbabwe (RBZ) Governor, Dr John Mangudya, says a total of 25 188 Mosi-oa-Tunya gold coins valued at ZW$20 billion have been sold as at 13 January 20223 with 84 percent bought by corporates while purchases by individuals accounted for 16 percent.

The gold coins have been massively embraced by the market such that the Central Bank has now indicated that their usage will continue in the short and medium term.

However, the bank will be availing them on a demand-driven basis as it seeks to promote a savings culture and provide alternative investment instruments to the public in the dual currency system.

In his 2023 Monetary Policy Statement issued yesterday, Dr Mangudya said the use of gold coins as an open market instrument for managing liquidity will continue as part of the bank’s sterilization interventions to achieve a stable exchange rate.

He said the update is impressive. As of Thursday, each coin was trading at USD$2 022.20.

“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 percent, were bought by corporates while purchases by individuals accounted for 16 percent,” said Dr Mangudya.

The gold coins have a vesting period of 180 days after which the bank can buy them back from the investors.

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

Dr Mandudya said the bank will continue to avail gold coins on a demand-driven basis as it seeks to promote a savings culture and provide.

“The Bank has no plans to withdraw the gold coins in the short and medium term until such a time when stability starts to create a high appetite for business and consumers to hold domestic currency denominated assets,” he said.

“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 RBZ introduced the coins in July last year to help cushion corporates and individuals from the negative impact of declining cash values and mop up large sums of Zimbabwe dollars sloshing in some bank accounts of corporates and wealthy individuals.

Local banks are temporarily not allowed to buy the gold coins for their own portfolios until the RBZ decides otherwise in line with developments in the economy.
Banks can only receive the coins from the RBZ for onward selling to their customers on behalf of the apex bank.