Zimbabwe made gold coins legal tender

[pmbug]

How did I miss this story!?!?

October 2022 (emphasis mine):

The introduction of gold coins by the Reserve Bank of Zimbabwe (RBZ) to mop up excess liquidity in the market and halt runaway inflation seems to be bearing fruit, at least for now. Individual buyers had taken up 35% of the bullion, with 65% being snapped up by corporates. As at 22 September 2022, a total of 9,516 gold coins had been sold to both individuals and corporate buyers, according to the Reserve Bank of Zimbabwe Governor, Dr John Mangudya. The gold coins are minted by the RBZ-owned Fidelity Printers, the sole buyer of gold in the country. Their price is determined by the international market rate for an ounce of gold, plus five per cent for the cost of producing the coin. Each coin weighs one troy ounce and has a purity of 22 carats. The Zimbabwe government took the unprecedented step of introducing gold coins as legal tender after inflation spiked from 191% in June to 257%. Currently, the central bank has been supplying the market with one-ounce coins, which hit the market at US$1,884.80, which saw fewer ordinary people participating because of the elevated price. The RBZ will in November introduce lower denomination gold coins to enable the participation of ordinary citizens. The smallest, a tenth of an ounce, will be made available to the public through banks and approved dealers.

IMF Believes Zimbabwe's Gold Coins are a Missed Chance to Build the Nation’s Gold Reserves - Africa.com

The introduction of gold coins by the Reserve Bank of Zimbabwe (RBZ) to mop up excess liquidity in the market and halt runaway inflation seems to be bearing

www.africa.com

This looks like Ron Paul's competing currencies bill in action, but on a limited scale/basis.

December 2022:

An International Monetary Fund (IMF) team led by Dhaneshwar Ghura conducted a visit to Zimbabwe from December 1 to 15.

At the conclusion of the mission, Ghura issued a statement, which, among other things, encouraged the Reserve Bank of Zimbabwe (RBZ) “to wind down the use of gold coins”.
...
The Monetary Policy Committee and the RBZ never viewed gold coins as a silver bullet, but a necessary intervention at the time. It was an idea mooted to contain and reverse the accelerated depreciation of the local currency.

The product worked, as we had imagined it would. Immediately after introduction, gold coins drew away attention from the United States dollar. In our books, the effect was very impactful.

Gold was seen as the best product to contain local currency volatilities, as it offered a viable alternative to the United States dollar.

There has been some misconception, with some referring to gold coins as a currency. For the record, gold coins are not a currency. By design, the RBZ did not intend to issue them without limit.

The authorities’ intention and logic were very clear.

They sought to achieve major gains in exchange rate stability from a limited number of gold coins.

This is why, as of November 2022, the RBZ had only issued 14 200 gold coins worth Z$13.6 billion.

The target was always to issue a maximum of 15 000 gold coins; this is why the IMF agreed with the authorities to wind down their issuance.

The next step, after achieving a measure of stability, is now on attractive local currency investment instruments to anchor our currency.

By Persistence Gwanyanya- Member of the RBZ Monetary Policy Committee

Zimbabwe gold coins have done their job | The Insider

An International Monetary Fund (IMF) team led by Dhaneshwar Ghura conducted a visit to Zimbabwe from December 1 to 15. At the conclusion of the mission, Ghura issued a statement, which, among other things, encouraged the Reserve Bank of Zimbabwe (RBZ) “to wind down the use of gold coins”. Ghura...

insiderzim.com

 

[JayDubya]

Any idea where I can purchase one?

I'm thinking I'd like to make a display. One of these contrasted with one of their one hundred trillion dollar notes.

 

[CiscoKid]

Any idea where I can purchase one?

I'm thinking I'd like to make a display. One of these contrasted with one of their one hundred trillion dollar notes.

They're all over ebay for around $30.

 

[pmbug]

They're all over ebay for around $30. ...

That's not the correct coin.

2022 Gold coin "Mosi-oa-Tunya" from ZIMBABWE - Numismag

2022 Gold coin "Mosi-oa-Tunya" from ZIMBABWE - Reserve Bank of ZIMBABWE - it is worth its weight in gold (one ounce) + a 5% premium

numismag.com

See also:

Gold coin reveal: RBZ releases details of the Mosi-Oa-Tunya Gold Coin

The gold coin shall be called the Mosi-Oa-Tunya Gold Coin with the following characteristics: (i) Weight – one troy ounce. (ii) Purity – 22 carats. (iii) Identification

miningzimbabwe.com

 

[CiscoKid]

I can't see how an ounce of gold makes for a very practical coin. It isn't as if many people spend $1,900 on groceries at one time.

 

[pmbug]

I can't see how an ounce of gold makes for a very practical coin. It isn't as if many people spend $1,900 on groceries at one time.

I doubt people are using them for commercial transactions. I imagine folks are using them to preserve wealth. Gresham's Law. Folks will use/spend the fiat and hold on to the gold.

 

[nickndfl]

5% premium is pretty good these days. They should sell a ton.

 

[pmbug]

The reports I read (in the OP) claimed that there was going to be a limit of 15,000 coins issued. This report seems to say that there is no hard limit. Also, earlier report says 14,000+ coins were "issued" (minted?) back in November. This report claims only 11,000 (presumably through the date of publication in January) were sold:

...
Reserve Bank of Zimbabwe governor, John Mangudya, believes that gold coins are an alternative foreign currency investment to dissuade traders, investors and other economic players from holding and hoarding forex for speculative purposes.

The International Monetary Fund has cautioned Zimbabwe against gold coins, but Mangudya insists on continuing to issue the assets, which are hedged against movements in the international spot gold price.

“Use of gold coins for mopping excess liquidity is particularly important in the dual currency environ where the public has a choice of holding both the dollar and local currency,” said Mangudya this week.

Zimbabwe has sold about 11 000 gold coins, with 35% of these taken up by individual investors and the balance by corporates.

Against this backdrop, the Zimbabwean central bank says it will not discontinue the gold coins “until such time when there is a high preference” by Zimbabweans “to hold domestic currency-denominated” assets.
...

https://www.iol.co.za/business-report/economy/gold-coin-interest-remains-high-in-zim-as-currency-devalues-6d3a48ac-3ab3-4620-8ae5-81e07f00dc7e

 

[pmbug]

THE Government has applauded Bard Santner Investors, a local investment firm for making gold coins more accessible to the public through their Gold Coin Unit Trust.

On Monday, Bard Santner launched the Gold Coin Unit Trust, which will enable investors with as little as US$15, to buy gold coins, also known as Mosi-oh Tunya.

The Reserve Bank of Zimbabwe (RBZ) launched gold coins in June last year, as an alternative investment instrument to ease pressure on the demand for the US dollars and mop up excess liquidity on the market which was destabilising the exchange rate.

In six months to June 2022, runaway inflation saw people rushing to cash in their local dollars for the greenback and this fuelled the depreciation of the domestic currency.

Just like ordinary unit trusts, collective investment schemes involving the pooling of funds by a number of investors, the Gold Coin Unit Trust enables investors to invest a minimum of just US$120 per year and own a share of a gold coin.

Alternatively, investors can accumulate units at a rate of US$15 per month. The minimum investment period is 180 days and a withdrawal notice period of seven days is required.
...

Gold coin unit trust to boost local savings

Zimbabwe's largest daily newspaper

www.herald.co.zw

 

[pmbug]

It sounds like Zimbabwe has almost gone full out with the Competing Currencies idea:

...
Last year, the Government enacted legislation to entrench the multi-currency system, which makes both the United States and Zimbabwe dollars legal tender for all local transactions for the duration of the National Development Strategy 1 (NDS1), the country's medium-term economic blueprint, which runs until 2025.

Before the enactment of the law, the Government had already legalised the use of foreign currency for local transactions in March 2020 at the height of Covid-19.

There was phenomenal growth in the use of US dollars including loans to corporates and individuals, payments of utility bills and local authorities, and salary payments.

The US dollar-based retail transactions also increased after the narrowing of the gap between black and official exchange rates since August last year when the Government put in place several measures to stabilise the local currency and tame inflation.
...

Zimbabwe: High Tax Loss Risk As Economy Re-Dollarises

With the Zimbabwean economy set to move towards full "re-dollarisation", economic analysts have warned of growing risk of serious potential tax loss coming along with the growing use of the US dollars.

allafrica.com

I wonder if economists will one day consider Zimbabwe as a case study on this issue.

 

[Goldbrix]

I can't see how an ounce of gold makes for a very practical coin. It isn't as if many people spend $1,900 on groceries at one time.

Savings/ Investment. Use the national fiat for shopping and day to day items.

 

[nickndfl]

Zimbabawe tried the one way with infinite inflation. Now the pedulum is swinging back the other way. It would be interesting to see if Venezuela can fix their economy in the same way.

I imagine the brain drain on those 2 countries has been exhorbitant.

 

[Goldbrix]

Zimbabawe tried the one way with infinite inflation. Now the pedulum is swinging back the other way. It would be interesting to see if Venezuela can fix their economy in the same way.

I imagine the brain drain on those 2 countries has been exhorbitant.

Venezuela common man is already clipping gold coins, bartering and trading services for commerce.
You don't hear about it because it does not fit the MSM narrative on how great socialism is.

 

[OldGarandDad]

Zimbabwe will be the scene for the next distractive insurrection, uprising, coup, (pick your favorite descriptive word). The central banker cabal is just keeping their funded, I mean hired, proxy forces in reserve until they need the world to focus on Zimbabwe and away from what they are really doing.

Ghaddafi tried to institute a gold based currency, a gold dinar, in Libya and all of a sudden there were how many rebel factions all bearing down on him? How much do you want to bet this will play out like a summer re-run on TV?

 

[nickndfl]

The Saudis will getvthe Libyan treatment if they do the same.

 

[pmbug]

A slightly different opinion on the state of monetary affairs in Zimbabwe:

... On a final note: those economists and other analysts who are peddling the narrative that the Zimbabwean economy is stabilising are either living in dreamland, fools’ paradise or on a cloud cuckoo land. ...

Is unofficial dollarisation of Zim financial system legal?

Is unofficial dollarisation of Zim financial system legal?

www.newsday.co.zw

 

[Goldbrix]

According to Cliff High the U.S. Mint is making GOLD and SILVER Eagles as fast as they can BUT are not offering them for sale to the public.
The Rainy Day may be closer than we thought.

OBTW: Nigeria is following suit of Zimbabwe.

 

[Cigarlover]

Zimbabawe tried the one way with infinite inflation. Now the pedulum is swinging back the other way. It would be interesting to see if Venezuela can fix their economy in the same way.

I imagine the brain drain on those 2 countries has been exhorbitant.

I think Venezuela still needs to get their gold back from England.

According to Cliff High

If he and Biden were sitting in the same room telling stories I'm not sure who I would believe. Neither of them have much credibility. There was an old thread on GIM that asked if CH was ever right. I said no then and will continue to say that until one day he gets something right.

 

[OldGarandDad]

According to Cliff High the U.S. Mint is making GOLD and SILVER Eagles as fast as they can BUT are not offering them for sale to the public.
The Rainy Day may be closer than we thought.

OBTW: Nigeria is following suit of Zimbabwe.

I guess the real way to verify this statement is to see how busy the suppliers of gold blanks to the US mint are? The US mint stopped making gold and silver blanks probably over 20 years ago.

 

[pmbug]

Reports from cloud cuckoo land claim 28,000 gold coins sold:

‘Gold coins a masterstroke’

Zimbabwe's largest daily newspaper

www.herald.co.zw

 

[pmbug]

Report from 3 days ago says Zimbabwe currency devaluation vs dollar / high inflation still problematic, but gold coin program is helping:

... The gold coins put on the market are gradually taking effect, stabilizing the violently fluctuating exchange rate of the Zimbabwean currency against foreign currencies. Also, the inflation rate in the African country has seen a month-on-month decline since the end of last year.

Zimbabweans Suffer from Currency Depreciation, Soaring Inflation

Zimbabwean are now suffering from the depreciation of domestic currency and the high inflation rate, against the backdrop of global inflation. Global food and energy prices have continued to soar, and so have prices in Zimbabwe. In addition, the U.S. Federal Reserve's continuous aggressive...

www.voazimbabwe.com

 

[pmbug]

... The gold coin Mosi-oa- Tunya is now the reference point of the trading of foreign exchange. The hard currency market has since jettisoned the fungible Old Mutual stock derivative of the Zimbabwe Stock Exchange.

“The duet of the two fiat monetary units of Old Mutual Implied Rate of Exchange and US dollar of Federal Reserve Bank no longer run rooster in Zimbabwe,” said Cde Mutsvangwa.
...

Zimbabwe development riles detractors

Zimbabwe's largest daily newspaper

www.herald.co.zw

^ It's a political party spokesperson touting the success of one of their programs (during an election season), so I don't know just how much the statements are reflective of reality. But if it's true, that's pretty amazing.

 

[engineear]

That's not the correct coin.

2022 Gold coin "Mosi-oa-Tunya" from ZIMBABWE - Numismag

2022 Gold coin "Mosi-oa-Tunya" from ZIMBABWE - Reserve Bank of ZIMBABWE - it is worth its weight in gold (one ounce) + a 5% premium

numismag.com

See also:

Gold coin reveal: RBZ releases details of the Mosi-Oa-Tunya Gold Coin

The gold coin shall be called the Mosi-Oa-Tunya Gold Coin with the following characteristics: (i) Weight – one troy ounce. (ii) Purity – 22 carats. (iii) Identification

miningzimbabwe.com

Are these minted from that place in Aussieland...the kind with a cremefilled center?

 

[engineear]

Zimbabwe will be the scene for the next distractive insurrection, uprising, coup, (pick your favorite descriptive word). The central banker cabal is just keeping their funded, I mean hired, proxy forces in reserve until they need the world to focus on Zimbabwe and away from what they are really doing.

Ghaddafi tried to institute a gold based currency, a gold dinar, in Libya and all of a sudden there were how many rebel factions all bearing down on him? How much do you want to bet this will play out like a summer re-run on TV?

Yeah, but Zimbabwe doesn't have oil to control...plus we would need to put in our banking scheme...remember cankles cackling...We came, we saw, we killed him...if I were an ambassador to Z land I think I'd want to relocate...take a demotion even.

 

[searcher]

Didn't want to start another thread so...............

Zimbabweans outraged by Al Jazeera exposé of gold smuggling elite​

5h ago

Harare, Zimbabwe – Revelations of gold smuggling by individuals affiliated with Zimbabwean government officials and the ruling party in an Al Jazeera documentary have triggered outrage in the country.

The four-part documentary titled The Gold Mafia was filmed by Al Jazeera’s Investigative Unit (I-Unit), based on dozens of undercover operations spanning three continents and thousands of documents.

Zimbabweans outraged by Al Jazeera exposé of gold smuggling elite

 

[pmbug]

Some things (like corruption) never change.